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Novembber 2009
2009

2010
Asia Energy
Outlook
Oil Price Exclusive
History 2009 Platts
Redefined Top 250
Global
Stockpiling or Consuming: Energy
China’s Current Oil Demand Company™
Rankings
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 insight

Publisher’s Note
Welcome to the third annual 2009 Asia Energy Outlook issue of Platts Insight. In pre-
vious years, we have sought to bring you a breakdown of the most pressing energy
matters facing the region and this year is no exception. Platts distinguished and global
editorial staff are well positioned to provide a unique level of analysis to Insight readers.
Indeed, demand for this level of reporting has forced us to continually increase the
distribution of the magazine—it now goes to more than 30,000 industry professionals
and financiers in Asia, North America, Europe and the entire Pacific Rim region.
Perhaps an increase in demand for reliable energy information is reflective of the
changes occurring in the industry. As companies deepen their commitment to find-
ing and using cleaner, more sustainable and alternative sources of energy, for example,
Patsy Wurster
there is an equally great need to understand how to incorporate these relatively new
ideas into the traditional ways that many companies have conducted their business.
The 2009 Asia Energy Outlook tackles some of these challenges by looking at the
increasingly active oil and coal markets in India, providing an overview of devel-
opments in the Chinese oil and renewables markets, examining the active Asian
LNG sector, covering the growing West Asian electricity market and exploring
global carbon and emissions issues.
Also, we are pleased to be able to showcase once again the full Platts Top 250
Global Energy Company Rankings™. Each year, Platts ranks the world’s top energy
companies by financial performance, identifies who’s up and who’s down and pro-
vides a breakdown of the Top 250 by industry and region while offering commen-
tary on trends and movement within the list.
We’ll be publishing additional issues of Insight throughout the year in conjunction
with other major events. If you’d like to learn more about our 2009 and 2010 issues,
visit our web site at http://platts.com/Magazines/Insight/. Thank you for reading.
Patsy Wurster
Publisher, Platts Insight

Guest Editor’s Note

“The global crisis is altering the shape of the world’s economy and shifting the
global economic center of gravity to the East.” So writes Lawrence Wong, and it is
a theme repeated throughout this issue of Insight.
Stories from across the energy spectrum show Asia is currently leading the way.
A genuinely global gas market is emerging as the Asian LNG business comple-
ments European and North American activity. Renewable energy investment is
burgeoning in Asian countries such as China, while regional investors such as Abu
Dhabi’s Masdar are at the forefront of innovative activity. The carbon market, to
date a cozy European business, is going global following elections in Australia, the
Martin Daniel US and Japan—and negotiators at the upcoming Copenhagen climate talks who
fail to acknowledge the new reality will be sadly disappointed.
But there are equally important shifts occurring within the Asian energy econo-
my, and these are also reflected in this issue. Within the region, India has developed
a new assertiveness, coming out of the shadow of China. If foreign companies won’t
invest there, then domestic ones will—a message finding resonance elsewhere.
And across the region the need to balance economic, social and environmen-
tal goals is also finding resonance. Witness the words of a senior Indian official,
speaking about the country’s energy needs in this issue’s coal story: “We also can-
not override the environment—we need to implement policy that looks after all
aspects including diversity, forestry, elephant trails. Riding roughshod over these
is not the way to develop growth.”
Martin Daniel
Editor, Platts Power in Asia

November 2009 insight 1

Inside
1 Publisher’s Note 33 As World Mopes, India
Patsy Wurster
Invests in Itself
Vandana Hari
1 Guest Editor’s Note
Martin Daniel
37 India: Stalking an Asian
5 Stockpiling or Consuming: China’s Coal Revolution
James O’Connell
Current Oil Demand
Ross McCracken
42 Carbon Trading —
10 Onwards and Upwards: Middle Asia and the New World Order
Eastern Electricity Prospects Frank Watson and Mayumi Watanabe
Martin Daniel

20 The Great LNG Bear of 2009, and Its 46 A Sustainable Energy Future for Asia
Lawrence Wong
Approaching Sequel
Jonty Rushforth
48 Oil Price History Redefined
28 New Renewable Energy Markets (Platts Top 250 Global Energy
Take Shape Across Asia Company Rankings™)
David R. Jones Melanie Wold

Authors

Martin Daniel Vandana Hari David R. Jones Ross McCracken James O’Connell

Jonty Rushforth Mayumi Watanabe Frank Watson Melanie Wold Lawrence Wong

Martin Daniel read Modern History at Oxford University. After
research on economic history there, he joined the Econom-
ics Unit of the then British Coal Corporation, following which
he became head of the Supply, Transport and Markets Group
at IEA Coal Research. He then worked at a UK energy media
and consultancy until 2001 when he joined Platts, where he
edits the newsletter Power in Asia. He is an active naturalist,
specializing in Asian forest birds.
Vandana Hari is Platts News Director for oil and gas industry
coverage in Asia, managing the Asia news operations of
Platts’ real-time electronic news service and flagship print
publication Platts Oilgram News. She is a regular commenta-
tor on BBC and CNBC television in Asia, providing her analy-
sis and view on oil industry developments and price trends.
She holds a bachelor’s degree in science and post-graduate
diplomas in journalism from the YWCA and the Times Re-

2 insight November 2009

search Foundation in New Delhi, and began her career with India’s
leading English-language daily The Times of India in 1989.
David R. Jones is Platts’ global renewable energy editor, based
in London. An environmental journalist with 20 years’ experience,
Jones edited newsletters on US state and local government, medical
waste management, oil pollution, and solid waste before joining
Platts in 2001 to cover coal and energy policy.
Ross McCracken, editor of Energy Economist, joined Platts in 1999 to
run the European and West African crude desk. He was previously
an editor with an Oxford University-based political and economic
consultancy, and has taught in Poland and China. He holds a master’s
degree in European studies from the London School of Economics
and his undergraduate degree is from the University of East Anglia.
James O’Connell, international coal managing editor, joined Platts
Metals in 2001, covering global precious metals trading. He joined
the coal team in early 2007, leading reporters in Europe and Asia
producing news for the global coal, electrical and steel industries.
He previously worked for Irish broadcaster RTE. He holds a BA in
English and History and a Higher Diploma in Applied Communica-
tions from the National University of Ireland.
Jonty Rushforth has been a journalist for eight years, and writing
about the energy industry and markets for four. After initially editing a
magazine about lawyers in Latin America, he moved to Platts, covering
European gas and power. In 2009 he moved to Singapore and helped
launch Platts’ spot Asian LNG assessment, the Japan Korea Marker.
Mayumi Watanabe joined Platts in 2004 having previously worked
for the Japanese media groups Yomiuri and Takarajima. She is
known for bringing transparency to molybdenum and indium, metals
used for solar cells, and normally works in Tokyo on the metals and
Production Manager: Nelson Sprinkle
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steel markets. She has written over 3,000 stories on these markets to
date. She co-authored her article while seconded to Platts’ London
office to work on the emissions market.
Frank Watson, managing editor of Platts Emissions Daily, is a
financial journalist and editor with nine years experience of com-
modities coverage, specializing in energy markets. He has headed
up the global emissions team at Platts since May 2008, having held
the position of Europe Editor on emissions markets since August
2005. Frank developed Platts’ coverage of the emerging EU Emis-
sions Trading Scheme, UN Clean Development Mechanism and Joint
Implementation schemes, covering regulatory policy under the EU
ETS and Kyoto Protocol, producing independent over-the-counter
price assessments, market commentary and analysis.
Melanie Wold is a freelance journalist specializing in US and European
investigative news stories covering a wide range of financial markets
and technology. She has written for industry publications including
Financial News, Securities Industry News, Traders Magazine, CME
Magazine and Profit & Loss Magazine. Prior to her freelance career,
Melanie was the European editor for Dealing with Technology and
Inside Market Data, both Incisive Media publications. Melanie has also
worked for Dow Jones Telerate and Platts, in various editorial and mar-
keting roles. Melanie holds a bachelor of science degree in business
administration from the University of Maine.
Lawrence Wong is chief executive of the Energy Market Authority
(EMA) in Singapore. In his career in the civil service, he has held
appointments in Trade & Industry, Finance, Health, and also as the
principal private secretary to the Prime Minister. Mr. Wong has a
masters in public administration from the Harvard Kennedy School.
He also obtained undergraduate and masters degrees in econom-
ics from the University of Wisconsin-Madison and the University of
Michigan-Ann Arbor.
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 oil

Stockpiling or
Consuming: China’s
Current Oil Demand
Ross McCracken, Editor, Platts Energy Economist

Based on refinery throughput and crude import data,

Chinese oil demand appears to be rising, while new car sales
are at record levels—the beginnings perhaps of a new oil
supply crunch. However, other data paints a very different
picture; falling consumption and large rises in inventory levels.
China is stockpiling not consuming, a process that should act
as a medium-term stabilizing factor on the oil market.

Future oil demand growth remains According to data supplied by Cus-

highly uncertain, sensitive to the speed
and extent of the economic recovery,
as outlined in the International Energy
Agency’s Medium-Term Oil report, pub-
lished in June 2009. However, what is
clear is that Chinese oil demand growth
is a key factor. Not only is it expected
to be the largest single source of de-
mand growth, but its sensitivity to GDP
growth is larger than for OECD coun-
tries. The IEA estimates that Chinese oil
demand could reach 9.6 million barrels
a day (b/d) in 2014 under a high GDP
growth scenario, or 8.5 million b/d un-
der conditions of lower growth.
As a result, oil demand in China is be-
ing closely watched. However, two dif-
ferent stories are emerging that reflect
the Chinese authorities release of sta-
tistics and the way in which the media
reports them.
toms and the National Bureau of Statis-
tics, and then interpreted by the media,
Chinese oil demand is racing ahead. It
rose by 4.21% on the year in July to a
record 34.92 million metric tons (mt).
This is ‘implied’ oil demand, the word
‘implied’ often falling from the media
headline where economy of wordage
and impact are all important. The figure
actually represents refinery throughput
plus net imported oil products. On the
same basis, implied oil demand in the
January-July period rose 0.7% to 221.47
million mt, compared with the same
period in 2008, the first increase since
the start of 2009.
However, if implied Chinese oil de-
mand appears to be up, consump-
tion appears to be down. According to
China’s official Xinhua news agency,
surveys by the China Petroleum and

November 2009 insight 5

oil
Chemical Industry Association (CP-
CIA) show that consumption of crude
oil dropped 2.9% in first-half 2009 to
190 million mt or 7.7 million b/d.
The missing link is, of course, stocks.
The government releases data on imports,
exports, domestic crude production and
refinery throughput, but does not release
official data on the country’s actual oil
consumption figure and oil stockpiles.
Using the implied demand data, it can
be seen that crude stocks in China—
domestic production plus net crude im-
ports less refinery throughput—rose by
8.53 million mt in the year to July.
Like the government, the CPCIA does
not provide overall stock levels, but it
does comment on changes in their lev-
els. According to the association, oil
product inventories registered large in-
creases in July. Chinese financial news
website Caijing reported that the July
oil products stocks of China’s giant re-
finers Sinopec and PetroChina were up
30% on the year, while July oil prod-
ucts sales were down 6%. The CPCIA
reported that through end-June, Chi-
na’s oil products inventory was 43.5%
higher than a year ago.
Oil Product Stockpiles
So while Chinese refiners have been
increasing their throughput, hitting
all-time highs from May through to
July, and reflecting rises in regulated oil
product prices, it appears that the extra
output is being stockpiled rather than
consumed, while crude inventories are
also growing.
1. Chinese gasoline consumption and imports/export balance (10,000 mt).
0 7,500
-200
-400
-600
-800
-1,000
1980 1990
Source: National Bureau of Statistics
6 insight November 2009
The increase in refinery throughput
in the second quarter of 2009 reflects
the resumption of operations at several
key refineries following maintenance,
as well as the start-up of a 240,000 b/d
refinery at Huizhou and a 160,000 b/d
refinery expansion project in Quan-
zhou. China’s state oil companies are
expected to add nearly 1 million b/d
of new refinery capacity by end-2009,
and they are still announcing new
plans; on September 17 Sinopec said
it would invest $3.5 billion to add a
further 240,000 b/d of capacity to the
Quanzhou refinery as part of a second
phase expansion.
It is doubtful that, in the short term, a
market exists for the additional output
either domestically or internationally.
Floating storage of oil products globally
was reported by the IEA to have risen
above 60 million barrels at end-June,
while preliminary data for end-August
indicated some stabilization at about
60-65 million barrels, down slightly
from end-July. Floating storage for
crude was put at 50-55 million barrels
at end-August down from about 65 mil-
lion barrels at end-July.
The problem of excess oil stocks is re-
flected in Chinese state company plans
to expand their own storage capacity.
At the beginning of September, the
China National Petroleum Corpora-
tion announced that it would expand
its oil storage capacity to over 45 mil-
lion mt in coming years, 15 million mt
of which would be for commercial use.
Local reports said that 66 new facilities
6,000
4,500
3,000
Imports[+]/Exports[-] (left) 1,500
Consumption (right)
0
2000 2002 2004 2006 2008

are planned to come into operation in
2009. CNPC itself opened ten new stor-
age facilities in first-half 2009.
The rush to build new storage reflects
both the long-term government aim of
increasing China’s strategic petroleum
reserve, as well as the short-term neces-
sity of finding a parking space for the
oil products being produced. Accord-
ing to a draft of the multi-billion-dol-
lar stimulus package for the oil, petro-
chemical and chemical sectors released
earlier this year, China hopes to have
the capacity to store an additional three
million mt of oil products by end-2009,
six million mt by 2010 and 10 million
mt by 2011.
Far from indicating a recovery in the
world economy and heralding the ap-
proach of a second oil supply crunch,
lackluster domestic Chinese consump-
tion suggests a slower recovery, while
increased stock levels and storage ca-
pacity can be seen as a medium-term
stabilizing factor for the oil market. The
relevant question might not be about
demand growth, but about what hap-
pens when China stops stockpiling.
Although it is only one month’s
data, preliminary indications for Au-
gust, released in September by the
Chinese General Administration of
Customs, appear to confi rm this out-
look. Chinese refi nery throughput fell
in August from the record high of July,
the fi rst month-on-month drop in
2009. Crude imports and oil product
imports also fell. The former remains
high, 18% up on the same period of
2. Chinese fuel oil consumption and imports/export balance (10,000 mt).
3,000
2,000
1,000
0 2,000
-1,000
1980 1990
Source: National Bureau of Statistics
oil
2008 at 18.47 million metric tons
(4.38 million b/d), but the latter was
down 28.87% on July and 18.86% on
the year at 2.71 million metric tons.
At the same time, crude and oil prod-
uct exports jumped 25% and 10.65%
respectively on the month.
Transport Key
Chinese oil demand growth is cen-
tered on the transportation sector with
gasoline and diesel demand on a ris-
ing trend and fuel oil usage declining.
This trend is likely to continue as fuel
oil use for power production is further
reduced, and as conventional refinery
capacity squeezes out China’s ‘teapots’,
The relevant question might not be about
demand growth, but about what happens
when China stops stockpiling.
which typically use fuel oil as a feed-
stock to produce off-specification gaso-
line and diesel.
In line with rising gasoline demand,
Chinese domestic car sales have in-
creased markedly in recent months,
another statistic used to reinforce the
apparent recovery in Chinese oil de-
mand. This reflects heavy government
subsidization. Beijing has halved taxes
on new cars and offered subsidies to the
country’s rural population to buy small
vehicles. Even in 2008, shielded from
crude’s highs on international markets
by regulated domestic prices, the num-
5,000
4,000
3,000
Imports[+]/Exports[-] (left)
Consumption (right)
1,000
2000 2002 2004 2006 2008
November 2009 insight 7
oil

ber of cars on China’s roads rose by a growth in car ownership in Europe

quarter over 2007. since 1980 does not correlate with the
How China’s transportation system region’s oil demand growth. While
develops will heavily influence the again the comparison suffers from be-
country’s future oil demand. The re- ing for a developed country versus a de-
covery in new cars sales in 2009 follows veloping one, Japanese oil demand has
a rise in monthly average sales from been falling since 1999, but per capita
360,794 in 2003 to 732,712 in 2007, car ownership rose from 404 per thou-
while they still rose 6.7% in 2008, de- sand people in 1999 to 441 per thou-
spite the economic slowdown. Yet per sand in 2004.
capita car ownership remains a fraction That China’s oil demand will start to
of that in developed countries and there rise as growth recovers is certain, reflect-
is clearly pent up demand for travel, as ing the country’s developmental sta-
shown by rail use statistics. tus. But in the short-term, oil demand
But how will China’s per capita car growth is arguably being over-stated
ownership evolve? While the huge size by a reliance on data based on refinery
of the population suggests an enor- throughput. In addition, while car own-
mous market, it may also prove a self- ership has a long way to rise to reach
limiting factor as population density is developed country levels, there are in-
high and urban pollution is already an ternal limitations specific to China that
issue. In addition, the country’s road suggest the country will never achieve
infrastructure is different to that in Eu- or perhaps even approach US levels. Nor
rope or the United States. can demand management initiatives be
Moreover, the relationship between ruled out by government, whether driv-
per capita car ownership and oil de- en by environmental, security of supply
mand growth is uncertain. Strong or local pollution imperatives. ■

3. Chinese oil product consumption 2007 (10,000 tons).

Astana

RU SSIA

KAZ AKHSTAN

Heilongjiang

Ulan Bator

Bishkek
MO N G O L IA Jilin
KYRG YZ STAN Inner Mongolia

Liaoning
TAJI KI STAN N O RTH Sea of
Xinjiang KO REA Japan
Gansu Beijing Pyongyang (East Sea)
Beijing
PAKI STAN Tianjin Seoul
Hebei
SO U TH
Shanxi KO REA
Shandong
Ningxia
Yellow Sea
Qinghai
CH IN A
Jiangsu JAPAN
Henan
Shaanxi

Tibet
Shanghai
New Delhi Anhui
Hubei
East China Sea
Kathmandu Sichuan Zhejiang
Chongqing
N E PAL Thimphu Jiangxi
BH U TA N Hunan
I N DI A Guizhou
Fujian
BAN G L A D ESH
Dhaka TA IWA N
2,000-4,000 Guangxi Guangdong Pacific
Yunnan
Ocean
1,000-2,000 BU RMA
Hong Kong
500-1,000 VIETNAM Macau
0-500 Hanoi

Bay of Bengal L AO S South China Philippine

Hainan Sea Sea
Vientiane PH IL IPPIN ES

Source: National Bureau of Statistics

8 insight November 2009

electricity
Onwards and Upwards:
Middle Eastern
Electricity Prospects
Martin Daniel, Editor, Platts Power in Asia
The Middle Eastern electricity sec-
tor doesn’t always get the attention it
deserves, bracketed as it is between the
sheer scale of the wider Asian power mar-
ket and the opportunities afforded by the
competitive European market. But recent
developments in the electricity sector of
the region in general and of the countries
comprising the Gulf Cooperation Coun-
cil (GCC) in particular underline the fact
that the Middle East is not only one of the
fastest growing but also most prospective
of global electricity markets.
Just a few examples may suffice to il-
lustrate the point. In September, Kuwait,
until now one of the last bastions of state
ownership of power generation in the re-
gion, saw at least ten consortia express
interest in providing consultancy servic-
es for what would be the country’s first
privately-owned independent water and
power producer (IWPP) project. Mean-
while Oman awarded a consultancy con-
tract covering services for what would
be the region’s first large-scale coal-fired
power plant. Elsewhere, the competition
to build the region’s first nuclear plant
is nearing a conclusion in Abu Dhabi.
And the initial phase of the region’s first
interconnected grid, covering Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia and
the United Arab Emirates (UAE), the six
countries comprising the GCC, entered
operation in the third quarter of 2009.
Admittedly for decades up to the late
1990s the Middle Eastern power sec-
tor was seen as a backwater, and not
10 insight November 2009
entirely without reason. Regardless of
country, the region’s electricity supply
industries showed very similar charac-
teristics, even though the different na-
tional grids were not connected to each
other. They were heavily subsidized be-
cause they charged below-cost prices for
their output, they comprised integrated
generation, transmission, distribution
and supply systems, they operated under
complete state control, they used power
plants fired almost exclusively with
indigenous oil and gas, and they were
relatively small by global standards. Put
simply, the region offered limited op-
portunities for outside involvement.
The Emergence of Private Power
Exceptions to this monolithic picture
appeared from the mid 1990s after Oman
tendered the region’s first independent
power producer (IPP) project. Awarded
to a predecessor of France’s GDF Suez
Energy International, the Manah-1 proj-
ect entered operation in 1996.
Manah-1 was relatively small at 90
megawatts (MW). And much of the
$216 million of funding for the proj-
ect was provided by the International
Finance Corporation, the private sector
lending arm of the World Bank Group,
together with the export credit agen-
cies of the United Kingdom and France.
These lenders are typical of the multi-
lateral and bilateral institutions usu-
ally called on to finance pioneering IPP
projects in untried markets.

But Manah-1 was the precursor of an
increasing number of increasingly am-
bitious projects as the private generation
model spread across the region over the
next decade or so. Involving both IPPs
and off-grid captive generators serving
energy-intensive industrial consumers,
the projects have grown markedly in
size and cost.
Take for example the Ras Laffan-C
IWPP project in Qatar, which will have
2,730 MW of electric capacity and has
an estimated cost of $3.8 billion. The
project was awarded in March 2008 to
the Ras Girtas Power Company, which
again includes GDF Suez Energy Inter-
national, this time in consortium with
Japan’s Mitsui & Co., Shikoku Electric
and Chubu Electric, as well as two local
energy companies.
In common with Manah-1, Ras Laf-
fan-C is being funded in part by mul-
tilateral, bilateral and export credit
agencies, in this case the Japan Bank
for International Cooperation, Export
Development Canada, Italy’s SACE and
the Islamic Development Bank. But the
project, which closed on $3.25 billion
of debt in August 2008, differs from
Manah-1 in that it got much of its fund-
ing from a syndicate of 21 international
and regional commercial banks, with
the finance extended by these banks
indicating the experience and comfort
levels such institutions have achieved
in lending to Middle Eastern private
power projects over the past decade.
Indeed from the late 1990s on, at a
time when power markets in many
parts of the world were closed or un-
attractive to international developers
and lenders, the Middle East became a
hotspot for private power investment.
Since Manah-1 in 1996, IPP and IWPP
developers in the GCC countries alone
have closed finance on projects with
more than 31,330 MW of electric and
1,724 million imperial gallons a day of
desalinated water capacity costing al-
most $42 billion (Table 1).
Moreover, this excludes the very large
amount of capacity developed on what
is effectively an IPP basis but to serve
industrial customers rather than the
grid. The 1,074 MW of captive genera-
electricity
tion capacity built by Tihama Power at
four sites in Saudi Arabia to serve the
energy company Saudi Aramco is typi-
cal of this type of investment.
The amount of activity is reflected in
the list of international investors active
in the region. GDF Suez Energy Interna-
tional may be the largest single inves-
tor but it is far from the only one, with
other European companies including
the UK-based International Power and
France’s Total also being active. Com-
panies from the US have become less
prominent since developers such as
CMS and PSEG withdrew in the mid
2000s to concentrate on their home
market, but are still represented by in-
vestors such as AES.
There is a strong contingent of Asian
investors including Japanese trading
houses such as Marubeni, Mitsubishi,
Mitsui and Sumitomo, and Japanese
electric power companies such as To-
kyo, Chubu, and Shikoku. Southeast
Asian companies including Singapore’s
Sembcorp Utilities and Malaysia’s
MMC, Tenaga Nasional Berhad and
Tanjong are also active. The substantial
Malaysian presence reflects not only
the level and maturity of IPP develop-
ment in their home market but also the
investors’ experience of funding large-
scale power projects using Islamic fi-
nancial instruments.
This is also a factor in the presence of
investors from within the region’s own
power and financial sectors, such as
the Abu Dhabi National Energy Com-
pany (Taqa) and the Gulf Investment
Corporation. Several of the region’s
governments, such as Abu Dhabi and
Saudi Arabia, require that domestic
companies hold controlling or signifi-
cant stakes in their IPP and IWPP proj-
ects, explaining their involvement. But
some of the regional-based IPP play-
ers are also active beyond their home
market and, indeed, outside the Middle
East in the case of Taqa.
Private Power Limitations
While private generation has become
entrenched in the Middle East and espe-
cially the GCC, it has not been accom-
panied by wider liberalization of the re-
November 2009 insight 11
electricity
gion’s electricity supply industries. True,
the privatization of existing generating
plants has occurred in places such as
Abu Dhabi, but it is usually where the
plant is to be expanded or replaced with
more capacity. Meanwhile with very
few exceptions the region’s electricity
transmission, distribution and supply
systems remain state-owned and in all
cases fully regulated. And critically, the
retail electricity prices charged through-
out the region still rarely cover the cost
of supply and are again fully regulated.
This means that the success of IPP and
IWPP projects in securing international
investors and lenders depends basically
on the bankability of the host govern-
ment, not of the power offtaker. And
outside the captive generation sector,
the sale of a plant’s output using any-
thing other than the single buyer model
backed by state guarantees is not feasible.
The region is very much at base camp in
terms of the ascent to a fully liberalized
and competitive power market.
Moreover since 2008 there has been
some reversion to the state financing and
ownership of power generating plants at
one time planned as IPP or IWPP proj-
ects. But the retreat from private and for-
eign participation to direct state invest-
ment in countries such as Saudi Arabia is
less ideological than pragmatic.
The reversion to state investment
originated with the rapidly increasing
cost of engineering, procurement and
construction contracts from the mid
2000s. Caused by the spiraling price of
equipment and other inputs at a time of
strong demand, as well as by the limited
pool of eligible contractors, the problem
was exacerbated from 2008 by the in-
creasing cost and much tighter avail-
ability of limited recourse finance as a
result of the global economic crisis.
The upshot was that many planned
private generation projects in the re-
gion have suffered significant delays
in implementation since 2007, leading
to fears of power shortages a few years
down the line. Some governments have
thus reverted for the moment to the
quicker and in cases cheaper model
of state financing to expedite the fast-
track construction of plants.
12 insight November 2009
Projected Demand Growth
The potential for power shortages
reflects the robust pace of growth in
electricity consumption in the GCC
countries and the wider Middle Eastern
region. Electricity use has increased at
a near double-digit level since the sec-
ond half of the 1990s, and is projected
to grow at a similar level over the next
decade or so at least.
For instance Bahrain is projecting
average growth of 8% a year to 2020,
while the UAE has projected 9% annual
growth to the same year. Kuwait sees
average growth of up to 9% a year to
2015, somewhat below the 10.8% an-
nual increase anticipated by Qatar to
the same year, while Oman is positing a
10% annual increase to 2014 and Saudi
Arabia a similar 10% increase to 2017.
The high past and projected growth
rate is partly due to the very low prices
paid for electricity by many of the re-
gion’s residential consumers. This has
led to burgeoning growth in electric-
ity use to operate air-conditioners and
other domestic appliances.
The introduction of higher prices
would slow or even reverse the rate of
growth in household electricity con-
sumption if governments were to reduce
subsidies and require residential power
users to pay economic tariffs. But pres-
ent indications are that this is unlikely
to occur, especially in those countries
with access to petrodollars. And even if
it did occur, industrial and thus overall
electricity demand is likely to continue
growing strongly.
This is because Middle Eastern gov-
ernments are acutely aware that their
hydrocarbon resources can yield added
value if the oil and gas is not export-
ed as a raw material but used either
directly or as electricity in the local
processing and manufacture of goods.
This has led to large-scale investment
in electricity-intensive projects such as
petrochemical plants, steelworks and
aluminum smelters.
The latter industry is a good example,
not least since electricity can account
for about 40% of smelting costs. And
aluminum smelters are proliferating in
the GCC and wider region.

Some of the smelters have been around
for decades. In Bahrain, Aluminium
Bahrain’s 830,000 metric tons (mt) a
year smelter is powered by a 2,150-MW
gas-fired power complex near Sitra which
was built in four stages from the 1970s.
Also developed in stages was the Dubai
Aluminium Company’s integrated com-
plex near Jebel Ali in Dubai, which by
2006 comprised an 860,000 mt/year
smelter and a 1,750-MW power plant.
Also part-owned by Dubai Alumin-
ium in the UAE is a 700,000 mt/year
smelter and 2,000-MW power project
at Taweelah in Abu Dhabi. Developed
through the project company Emirates
Aluminum, the complex is scheduled
for operation from 2010.
The same year is due to see the com-
missioning of Qatalum’s 1,350-MW
gas-fired power project and 585,000
mt/year smelter at Mesaieed in Qatar.
And ahead of both these 2010 proj-
ects, the Sohar Aluminum Company
in Oman has recently commissioned
a 1,000-MW project in tandem with a
350,000 mt/year smelter.
All of these operating and construct-
ing projects could be dwarfed by the
integrated smelter and power project
being developed in stages at Jazan Eco-
nomic City in Saudi Arabia by a consor-
tium including the local Saudi Binladin
Group, Malaysia’s MMC Corporation
and China’s Chalco. To host a 4,860-
MW power project once fully built, the
1. Primary energy consumption by region, 2008 compared with 2007.
7
6
5
4
percentage
3
2
1
0
-1
-2
-3
North America
Central/
South America Eurasia
Source: BP Statistical Review of World Energy 2009
electricity
first stage of the project will include a
2,460-MW power plant scheduled for
operation from 2012.
Saudi Arabia is also home to an in-
tegrated project comprising a 1.6 mil-
lion mt/year aluminum refinery and a
720,000 mt/year smelter being devel-
oped at Ras Al Zour by the local Ma’aden.
Originally planned to include a 1,600-
MW oil-fired captive plant, it may now
draw power from a 2,400-MW state-run
project being developed in the area.
Add in the electricity needs of petro-
chemical and other industrial projects,
not to mention the large and often-
increasing amount of power needed to
produce the region’s oil and gas, and
the high projected growth in GCC
and wider regional electricity demand
is largely explained. For instance, Sau-
di Arabia has projected that the 169.3
TWh of power it consumed in 2006
will rise to 572 TWh in 2032, while in-
stalled capacity of 39,242 MW in 2008
is projected to rise to 140,000 MW by
2032. In the somewhat nearer term, the
state-controlled Saudi Electricity Com-
pany has projected that peak demand
will rise from 41,043 MW in 2009 to
75,155 MW in 2020.
Meanwhile Qatar, which had 3,660
MW of operational capacity in 2006, is
projecting that it will need 16,260 MW
of new plant from 2011 to 2036 on top
of the additional capacity built between
2006 and 2010. And the UAE projects
Europe/ Africa Asia Pacific Middle East World
November 2009 insight 13
electricity
that the 16,760 MW of capacity installed
in 2006 will rise to 40,858 MW by 2020.
The projections of those countries
whose forecasts extend less far into the
future are also indicative of the scale of
the needs. Oman, for example, is pro-
jecting that the demand of 13.9 TWh
recorded in 2006 will almost double to
27.5 TWh as early as 2014.
And the growth bonanza is not lim-
ited to the GCC countries. Iraq, for ex-
ample, anticipates strong growth in fu-
ture demand on top of the fact that the
6,000 MW of capacity available in mid
2009 is well below existing demand of
more than 10,000 MW. In early 2009
the country thus signed agreements
to purchase more than 10,000 MW of
generating equipment as the first stage
of government plans to quadruple in-
stalled capacity by 2015.
Meanwhile neighboring Iran is plan-
ning to add a large amount of capac-
ity to satisfy unmet existing demand,
meet future requirements and replace
aging generators. In this regard the
South Korean construction company
Doosan Heavy Industries recently said
that “the Iranian power generation
market is embracing a flurry of proj-
ects to construct new combined-cycle
power plants due to the deterioration
of existing power plants.”
Needed: Capital and Fuel
The new capacity and the associated
expansion of the region’s transmission
and distribution networks projected by
the region’s governments and power
utilities will require a very considerable
amount of capital. The International
Energy Agency (IEA) in its World Energy
Outlook 2008 projected in its reference
scenario that $158 billion of invest-
ment would be required by the Middle
East power generation and wires sector
from 2007 to 2015, with $59 billion of
the total being for generating plants.
The IEA went on to project that from
2016 to 2030 the regional electricity
sector would need a further $352 bil-
lion of investment. This would include
$135 billion for generating plants and
$217 billion for transmission and distri-
bution systems.
14 insight November 2009
Apart from a considerable amount of
capital, the new capacity needed to meet
the projected growth in demand will
need a considerable amount of fuel.
Middle Eastern electricity was tradi-
tionally generated almost entirely from
oil. Baseload power was produced from
crude oil or heavy fuel oil burnt in large
steam turbine plants, while diesel and
other lighter oil products provided the
feedstock for peaking plants and small-
er, isolated grid systems.
That was followed in the 1990s by a
switch to the use of natural gas in more
efficient plants as oil prices increased
and resources depleted. Over the past
decade, gas used in combined-cycle and
other plants has taken over from oil in
many areas. According to the IEA, 380
TWh, or 56%, of the region’s 681 TWh
of power needs in 2006 were generated
from gas, with 240 TWh coming from
oil and the remaining 8% coming from
coal and hydroelectric plants.
However, there is increasing competi-
tion for the region’s gas. It is required for
export as liquefied natural gas (LNG) or
through pipelines, for use as feedstock
in the petrochemical and other indus-
trial sectors, and for reinjection to en-
hance oil recovery.
Gas use for power generation has thus
come into question. This is especially
true in countries with limited indig-
enous resources and where alternative
supplies are not available from regional
pipelines such as Dolphin Energy’s sys-
tem, which links Qatar with Oman and
the UAE, or from the LNG imports pro-
posed in, for instance, Kuwait.
This has led to a reversion to oil use in
a few areas. For example, the Saudi Ara-
bian authorities require that new power
plants in some parts of the country are
fired with heavy crude or heavy fuel oil
to conserve gas reserves. But the question
mark over gas has also spawned interest
in the use of coal, nuclear, renewable and
alternative energy sources to help meet
the region’s future power needs.
Coal to the Rescue?
The Middle East has sparse coal re-
sources. There is limited production
and consumption of indigenous coal,

with Turkish and Iranian use of locally
mined coal for power generation being
exceptions. But as gas prices rose from
the mid 2000s a number of Middle
Eastern countries examined the option
of importing coal.
Oman is one such country. In the mid
2000s a consortium comprising the lo-
cal Oman Oil Corporation with South
Korea’s LG Energy and Korea Southern
Power commissioned studies by consul-
tants John T Boyd and PB Power on coal
mining and power projects, respective-
ly. Based on these studies the consor-
tium sought to undertake an integrated
mining and power project on the basis
of direct negotiation with the power au-
thorities. But in April 2008 the govern-
ment decided to award the country’s
first coal-fired project through an open
competitive tender.
The state-run Oman Power and Water
Procurement Corporation is thus plan-
ning to tender a 1,000-MW to 1,200-
MW coal-fired IPP project at Duqm for
operation from 2015. Technical and fi-
nancial advisory contracts on the proj-
ect were awarded to WorleyParsons and
KPMG, respectively in September 2009.
Several other jurisdictions have ex-
amined the coal option, especially in
the UAE. For instance a 1,000-MW
coal-fired IPP project at Ajman is being
developed by Malaysia’s MMC Utili-
ties under an agreement signed in July
2. Electricity consumption by world region, 2008 compared with 2007.
6
3
percentage
-1
-2
North America Central/
South America
Source: BP Statistical Review of World Energy 2009
electricity
2008. The project would operate under
a 20-year concession with the cost be-
ing estimated at $2 billion.
A separate coal-fired plant is planned
at Ras al Khaimah, another of the north-
ern emirates. Through a special purpose
vehicle, Middle East Coal, the state-run
RAK Investment Authority bought eq-
uity in an Indonesian coal mining proj-
ect in early 2009 to provide fuel for the
Mina Saqr project. In the first instance
this is planned to have 600 MW from
2011, but it could eventually host up to
4,000 MW of capacity.
In Dubai a 2,000-MW gasified coal-
fired combined-cycle plant was under
consideration in 2008 when the state-
owned Dubai Electricity & Water Au-
thority signed a memorandum of un-
derstanding relating to the project with
a consortium of local and Chinese com-
panies. Meanwhile in neighboring Abu
Dhabi a clean coal technology-based
power plant costing $1 billion was be-
ing studied by Taqa in 2007.
Renewable and Nuclear Prospects
Abu Dhabi’s interest in clean coal
technology reflects its wider focus on
renewable and alternative energy proj-
ects. The Abu Dhabi Future Energy
Company (Masdar) is responsible for
promoting renewable and new energy
projects, with one of its first projects be-
ing a 10-MW solar photovoltaic plant at
Europe/ Africa Asia Pacific Middle East World
Eurasia
November 2009 insight 15
electricity
Masdar City. Developed through a joint
venture with Germany’s Conergy, the
project was commissioned in 2009.
Masdar is also promoting at least
500 MW of concentrated solar capac-
ity through 100-MW projects. The 25-
year concession for the fi rst scheme, a
parabolic trough-based project at Ma-
dinat Zayad known as Shams-1, was
tendered on a build, own and oper-
ate basis in 2008 with four bids being
received. But the high-priced bids led
Masdar to look at relocating the plant
and tendering it again.
Beyond the solar business, Masdar
is developing a 390-MW hydrogen-fu-
eled power project through Hydrogen
Power Abu Dhabi, a joint venture with
Hydrogen Energy, which comprises
the UK’s BP Alternative Energy and
Rio Tinto. The project will incorporate
CO2 capture and storage in producing
oil fields. A fi nal investment decision is
currently targeted for the third quarter
of 2010 with initial operation envis-
aged from 2013.
Several other countries in the region
have ambitious plans for renewable and
especially solar energy. For instance in
Qatar the state-run Qatar General Elec-
tricity and Water Corporation said in
2008 that solar plants should account
for 4,500 MW of the 16,260 MW of
the new capacity it projected as needed
from 2011 to 2036. The capacity would
be installed in 500-MW complexes.
Meanwhile in Oman a 2008 study
sponsored by the Authority for Electric-
ity Regulation and undertaken by con-
sultants Cowi and Partners proposed
the establishment of large-scale solar
thermal plants and up to 750 MW of
wind turbine capacity in the south of
the country. The tender for a 200-MW
solar thermal project was under consid-
eration in 2009.
Apart from renewable energy, nuclear
power is in the frame as a long-term so-
lution for the electricity requirements
of many Middle Eastern countries.
Iran’s highly-contentious nuclear pro-
gram started much earlier than most,
and has since hogged most of the head-
lines, but it is far from the only regional
country with nuclear aspirations.
16 insight November 2009
The UAE in general and Abu Dhabi
in particular have travelled well down
the road to nuclear generation. In 2008
the UAE forecast that it would require
40,858 MW of capacity by 2020, with
30% projected to be nuclear plants.
Abu Dhabi is planning to develop nu-
clear capacity on the basis of joint local
and foreign ownership in line with its
IWPP model. Sites on the coast between
Abu Dhabi and Ruwais and in Fujairah
were investigated from 2008, with con-
struction of the first four reactors then
scheduled to begin by 2012 and opera-
tion planned from 2017.
In April 2009 three consortia were
prequalified for the foreign equity stake
including France’s GdF Suez Energy
International, Areva and Total; Japan’s
Hitachi with the US’s GE Energy; and
South Korea’s Korea Electric Power with
Hyundai Engineering & Construction.
The $41-billion project contract was
said to be near award at the time of
writing (early October).
Trading Power, Sourcing Kit
The Middle East’s burgeoning elec-
tricity demand will be met not only by
building more generating plants within
each country but also by trading elec-
tricity between countries to take advan-
tage of differing national load patterns.
As a first step the GCC Grid Intercon-
nection Authority is connecting the
grids of the six GCC countries through
a three-stage project due to be complet-
ed in 2010. The $1.25-billion project
involves 5,000 MW of potential elec-
tricity flows regulated by a power ex-
change and trading agreement signed
in July 2009 by all six countries apart
from Oman.
The GCC project could be followed
by the gradual interconnection of elec-
tricity systems in the wider region and
beyond. But meeting the projected de-
mand will still require the construction
of a large amount of additional generat-
ing plant.
This is expected to include a substan-
tial amount of renewable and nuclear
capacity as well as some coal and oil-
fired plant. But meeting the region’s
power needs will still need a substantial

amount of additional gas-fired plant.
And, as already noted, the fueling of
this capacity could have a significant
impact on the availability and price of
gas for other uses.
There is little question that this will be
one of the key issues facing the Middle
Eastern power and wider regional en-
ergy sector for decades to come. In this
context, increasing the efficiency of gas-
fired generating plant—getting more
kilowatt-hours per Btu—is an important
concern for the region’s power utilities.
The efficiency issue is also important
because power plant equipment and
construction costs have tended to be
significantly higher in the Middle East
than elsewhere. Middle Eastern power
plants have traditionally been “gold-
plated” facilities built and equipped
by leading US, European, Japanese and
South Korean companies. Chinese, Indi-
an, Russian and other suppliers of often-
cheaper equipment and construction
services have made limited inroads.
While the high cost per kilowatt of
regional generating projects partly re-
flects indigenous factors such as high la-
bor and other input costs, it also reflects
stringent qualification criteria which
have in turn resulted in a limited pool of
eligible equipment and contractors. Not
only do these tend to be more expen-
sive per se, but from the mid 2000s the
substantial number of projects chasing
a limited number of contractors made
for even more expensive plants.
In some recent tenders there appears
to have been greater acceptance of
non-traditional sources of equipment
and services. This has been assisted
by the improving quality and perfor-
mance of, for instance, the main Chi-
nese and Indian equipment suppliers
and contractors.
The likelihood is thus that there will be
some shift in the sourcing of power plant
equipment with a possible reduction in
unit costs. But the Middle East appears
likely to remain a high cost region.
The Inevitability of Competition?
The substantial amount of invest-
ment required by the regional power
sector means that capital will in all
electricity
probability continue to be sourced from
both state coffers and from private in-
vestors and lenders. But perhaps the
biggest question mark over the future
shape and direction of the Middle East-
ern power sector is whether that private
involvement will remain limited to IPP
and IWPP projects operating under the
single buyer model, or whether the re-
gion goes further down the liberaliza-
tion route and embraces competitive
electricity generation and supply.
Given the generally conservative na-
ture of Middle Eastern economic ac-
tivity, a move to merchant generation
and contestable consumers might seem
improbable any time soon. In particu-
lar, to have any real meaning a move
to competitive electricity supply would
require a shift to cost-reflective retail
tariffs, which would be unlikely to be
politically popular.
But given the cost of subsidizing pow-
er use, retail tariff hikes are not out of
the question. And wholesale competi-
tion between generators would not nec-
essarily impact on retail prices and thus
may prove easier to adopt.
Some Middle Eastern countries have
in fact already prepared detailed road-
maps for the transition to a more com-
petitive market. Most notably, the priva-
tization and liberalization of the Saudi
Arabian power market is planned.
The country’s state-run Electricity
and Cogeneration Regulatory Authority
(ECRA) said in 2008 that a three-phase
program was under consideration. This
would see the state-controlled Saudi
Electricity become a holding company
from 2010 with its power plants being
unbundled into four generating com-
panies and its transmission assets be-
ing transferred to the proposed Saudi
Grid Company. ECRA envisaged that
at least three of the generating com-
panies would be privatized, while the
grid company might either seek a stra-
tegic partner or tender out projects on a
build and lease basis.
A second phase of the program run-
ning to 2013 would involve the intro-
duction of wholesale competition and
a spot market. It would also involve
the corporatization and possibly sale of
November 2009 insight 17
electricity

Saudi Electricity’s distribution and sup- power market becomes more intercon-
ply assets in the ECRA blueprint. nected, and fueling and technology
The third phase from 2013 to 2016 issues become increasingly pressing, it
would involve the full introduction of seems likely that the pressure to intro-
wholesale competition and the start of duce competition into the wholesale
retail competition, according to ECRA. market will grow as a way of securing
While the timetable attached to the cost and efficiency gains.
Saudi Arabian liberalization program Regardless of the various question
may prove ambitious, the radical na- marks, one thing is clear—going for-
ture of the program in one of the re- ward the Middle Eastern electricity
gion’s more conservative jurisdictions sector will require close attention both
is indicative of the wider potential for from power industry players and the
change. And as the Middle Eastern wider energy community. ■

Table 1. Financed IPP and IWPP projects in GCC countries by year of operation.
Country Project Type and fuel mw migd Op $m Key investors
Oman Manah-1 IPP (oc-g) 90 - 1996 216 MENA Infrastructure
Oman Manah-2 IPP (oc-g) 180 - 2000 104 MENA Infrastructure
UAE Taweelah-A2 IWPP (cc-g) 720 50 2001 541 Taqa, Marubeni
Oman Kamil IPP (oc-g) 285 - 2002 133 IP
Qatar Ras Abu F-1 IPP (oc-g) 377 - 2002 213 QEWC
Oman Salalah IPP-AE (oc-g) 242 - 2003 270 Dhofar Power
UAE Taweelah-A1 IWPP-AE (cc-g) 1,360 84 2003 1,473 Taqa, Total, GDF
Oman Barka-1 IWPP (cc-g) 427 20 2003 455 AES
UAE Shuweihat-1 IWPP (cc-g) 1,500 100 2004 1,636 Taqa, IP, Sumitomo
Qatar Ras Laffan-A IWPP (cc-g) 756 40 2004 700 AES, QEWC
Oman Sohar IWPP (cc-g) 585 33 2007 620 GDF
Bahrain Ezzel IPP (cc-g) 950 - 2007 500 GDF, GIC
Bahrain Hidd IWPP-AE (cc-g) 910 90 2007 1,250 IP, GDF, Sumitomo
Qatar Ras Abu F-2 IPP (cc-g) 597 29 2007 623 QEWC
UAE Umm al Nar IWPP-AE (cc-g) 2,450 94 2007 2,116 Taqa, IP, Tepco, Mitsui
UAE Taweelah-B IWPP-AE (cc-g) 1,973 157 2008 2,900 Taqa, Marubeni, Tanjong
Qatar Ras Laffan-B IWPP (cc-g) 1,025 60 2008 900 QEWC, IP, Chubu
Oman Barka-2 IWPP-AE (cc-g) 678 26 2009 800 GDF, Mubadala
Saudi Shoaiba-3 IWPP (st-o) 917 195 2009 2,460 Malakoff, TNB, Acwa
UAE Qidfa IWPP-AE (cc-g) 880 100 2009 1,360 Taqa, Sembcorp
Qatar Mesaieed IPP (cc-g) 2,000 - 2010 2,400 Marubeni, Chubu
Saudi Shuqaiq IWPP (st-o) 1,020 47 2010 1,870 Mitsubishi, GIC, Acwa
Saudi Jubail IWPP (cc-g) 2,750 210 2010 3,443 GDF, GIC, Acwa
UAE Fujairah-2 IWPP (cc-g) 2,000 130 2010 2,800 Taqa, IP, Marubeni
Bahrain Al Dur IWPP (cc-g) 1,234 96 2011 2,100 GDF, GIC
UAE Shuweihat-2 IWPP (cc-g) 1,500 100 2011 3,200 Taqa, GDF, Marubeni
Qatar Ras Laffan-C IWPP (cc-g) 2,730 63 2011 3,800 GDF, Mitsui, Chubu
Saudi Rabigh IPP (st-o) 1,200 - 2013 2,700 Kepco, Acwa
Note: IPP = independent power producer, IWPP = independent water and power producer, AE = acquire and expand, oc = open cycle, cc = combined
cycle, st = steam turbine, g = natural gas, o = oil, Taqa = Abu Dhabi National Energy Corp, IP = International Power, QEWC = Qatar Electricity & Water Co,
GDF = GDF Suez Energy International, GIC = Gulf Investment Corp.

Source: Platts, based on national and company data

18 insight November 2009

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liquefied natural gas
The Great LNG Bear
of 2009, and Its
Approaching Sequel
Jonty Rushforth, Senior Asia LNG Editor, Platts LNG
Market observers had expected 2009
to be a bearish year for liquefied natural
gas (LNG). Increased unconventional
gas production in the US had already
knocked back imports in 2008, while a
wave of new gas liquefaction capacity
was due to come onstream worldwide.
In some ways, the observers have been
proven right, at least insofar as prices
have come down. US Henry Hub front
Source: Getty Images
20 insight November 2009
month prices have fallen back from
above $8.00/MMBtu in July 2008 to
trade below $3.00/MMBtu in September
2009, while the front month at the UK’s
National Balancing Point (NBP) has seen
an even more dramatic fall, from above
$14.00/MMBtu in September 2008 to
below $4.00/MMBtu in 2009.
Spot prices for LNG followed suit.
While LNG is a price taker in the At-
lantic basin, in Asia Pacific it also re-
sponds to local fundamentals. A loss
of Japanese nuclear output in 2007 had
raised gas demand for power genera-
tion, while new consumers and robust
economic growth among traditional
buyers kept demand buoyant across the
region into late 2008, and spot buyers
paid upwards of $20.00/MMBtu.
By summer 2009, spot LNG prices
had fallen considerably. Platts’ Japan
Korea Marker (JKM), an assessment of
prices for spot cargoes delivered in the
forward month to Japan or Korea, fell to
under $4.00/MMBtu in May, dipping
below NBP hub prices in the UK.
But while the market had expected a
supply-driven fall in prices, in the end
much of that supply did not appear.
“In fact global liquefaction is lower
this year so far than it was at the same
time last year, and it looks like it will
fi nish, if not lower, then only a little
above last year or flat,” Keith Barnett,
director of global commodities strat-
egy analysis at Merrill Lynch, said in

September. He points to “significant
problems” at plants in Nigeria, produc-
tion cuts in Algeria, and “lesser prob-
lems with Asian production.”
And LNG production units, or
trains, have been slower to come on
than expected, Barnett says. “Why
hurry to bring production online, and
pay overtime, in the current pricing
environment?”
Low production was evident by the
summer, when Anglo-Dutch major
Shell reported a 6% year-on-year drop
in LNG production worldwide for its
second quarter results. Shell saw both
sides of the supply situation, as it has
equity in new capacity that came on-
stream in Russia and Australia, but also
saw LNG output from Nigeria plummet
due to upstream problems. Excluding
Nigeria, Shell’s equity production was
up 7% year on year in the second quar-
ter, it said.
Fellow major ExxonMobil, which
does not strip out LNG from the broad-
er gas picture in its quarterly results,
said in July that its average gas produc-
tion in the second quarter was down
5.6% year on year, to 8.013 million
cubic feet per day. The company said
that “new production volumes from
1. Global gas prices, 2009.
Algonquin City Gate Fwd Mo
SoCal Fwd Mo
10
6
$/MMBtu
2-Feb 2-Mar 6-Apr 4-May
Source: Platts
liquefied natural gas
project additions in Qatar, the United
States and the North Sea were more
than offset by field decline and lower
European demand.”
So if supply has dropped back, what
has pulled down prices? “For LNG, it’s
primarily been down to a big drop in
consumption in Japan, Korea, Taiwan,
and to some extent Spain,” John Harris,
director for global LNG at Cambridge
Energy Research Associates (CERA),
says. “European demand has also suf-
fered from the economic downturn.
The US has suffered from supply side
weakness, but demand has also been
hit there … On the whole, price has
been demand-led this year.”
Total Asian LNG imports were al-
ready looking lower year on year in the
last quarter of 2008, although in Janu-
ary 2009 they again showed an annual
increase, of 452,175 metric tons (mt), or
4.4%. But from then on the decline be-
gan in earnest, reaching a peak annual
rate of 18.7% in May, a drop of 1.77 mil-
lion mt over the previous year.
Liquefaction trains are not easily
turned down; analysts say there is tol-
erance for perhaps a 5% reduction in
output, but not much more. So the
fall in previously anticipated Asian
LNG Japan/Korea Marker UK NBP Fwd Mo
France PEG Fwd Mo
1-Jun 6-Jul 3-Aug 7-Sep
November 2009 insight 21
liquefied natural gas
requirements had to be otherwise ac-
counted for.
In 2008 Asian buyers had attracted
some spot and short-term cargoes across
from the Atlantic basin by paying sig-
nificant premiums to gas hub prices. As
spot interest fell back in 2009, the Asian
premium disappeared. “Asian buyers
are not paying as much for LNG,” says
Chris Holmes, vice president at Purvin &
Gertz. “They want hub prices, so we’ve
seen LNG prices come down. There’s no
reason why people should pay the high
prices they paid last year.”
With no premium in Asia Pacific, most
Atlantic cargoes stayed west. Between
April and July 2008, Japan received
2.1 million mt of LNG from Trinidad,
Algeria, Egypt, Nigeria, and Equatorial
Guinea. In the same period a year later
it received just 342,306 mt from Nigeria
and Equatorial Guinea, and none from
the other producers.
But even after cutting out the cross-
regional imports, Asian buyers still need-
ed to cut back. They used contractual
“downward quantity tolerance” clauses,
which typically allow drops of 5-10%
in term supplies. That in turn left Asian
producers with spare product. With no
interest locally, they turned to European
markets, and prices reflected that switch
in focus. The JKM was flat to the UK’s
NBP, or showed a discount, for much of
the second quarter of 2009.
2. Total Asian LNG imports, 2008-9.
China
12
10
8
mt millions
1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09
Source: Platts
22 insight November 2009
With the LNG heading west, the UK
in particular saw a rapid rise in imports,
facilitated by the commissioning of two
major new regasification terminals and
the expansion of an existing one. NBP
prices fell back, and so the few buyers
left in Asia reduced their own price ex-
pectations as a result. A Japanese nucle-
ar outage provided some relief for sup-
pliers, followed by a gradual economic
recovery in traditional Asian markets,
but spot prices struggled to climb much
above $5.00/MMBtu.
Takayuki Nogami, senior economist
for global oil and gas markets at Japan
Oil, Gas and Metals National Corp
(JOGMEC), summarizes the situation:
“Asia Pacific demand has plunged, with
a double-digit drop, due to the reces-
sion. Buyers have reduced imports, LNG
spot markets in the Atlantic Basin are
bearish, and some new LNG supply has
come on stream, flooding the market.
That left regional spot prices at $4.00-
5.00/MMBtu DES [delivered ex-ship] in
Asian markets.”
That is not to say that all is lost and
prices will tumble to all-time lows,
however. In fact, Asian spot prices
seem to have stabilized at about the
level Nogami identifies. One reason for
that is that the low prices have brought
in opportunistic buyers. China, with
two new terminals starting up in 2009,
has seen annual import growth every
South Korea Taiwan Japan India

month this year. And India reached its
highest ever monthly import volume,
at 1.04 million mt, in March, when
much of the rest of the region was see-
ing severe declines.
For both countries, spot LNG is con-
siderably cheaper compared to alterna-
tive fuels, namely naphtha in India and
fuel oil in China. Both of those alterna-
tives have risen steadily since the start
of 2009, with fuel oil FOB Singapore
at around $10.00/MMBtu in the sum-
mer and naphtha CFR Japan as high as
$15.00/MMBtu.
CERA’s John Harris says that since
those buyers have already been brought
into the market, lower prices would not
attract any more demand for LNG in
Asia: “Spot buying has been a reflec-
tion of low spot prices. If prices were
any lower, you wouldn’t see any more
demand.” He adds that “sellers are go-
ing to be inclined to look at alternative
fuels and extract that value.”
By the third quarter, there were also
signs of some recovery in demand in
the traditional LNG markets. Taiwan’s
CPC issued a tender in September for
three spot cargoes after staying out of
the market for several months. Trad-
ers began talking of some spot demand
3. Oil products vs JKM.
Qinhuangdao Coal
Naphtha CFR Japan
18
16
14
12
$/MMBtu
10
24-Mar 7-Apr 21-Apr 5-May 19-May 2-Jun
Source: Platts
liquefied natural gas
from South Korea as well, although for
only for a few cargoes.
So could the slight signs of recovery
in demand from the traditional mar-
kets, combined with opportunistic buy-
ing from new markets, pull prices back
up in 2010? Merrill Lynch’s Keith Bar-
nett thinks not: “I really don’t see any-
thing that can turn the market around.
A miraculous recovery in north Asian
countries could take some of the pres-
sure off, but otherwise it’s going to be a
grind as it works out.”
The problem is that the effect that
everyone was waiting to see in 2009 is
likely to fi nally come through in 2010
instead. The “missing gas” is heading
inexorably towards the markets. An-
drew Pearson, head of LNG research
at Wood Mackenzie, says: “New LNG
supply projects have begun to start up,
although it will be next year before
this new volume has its full impact
on the market. Next year we will see a
big increase in LNG trade as these new
plants ramp up.”
Already new trains have started up in
2009 in Russia, Indonesia, Yemen and
Qatar, with more trains scheduled to
follow in Yemen and Qatar, and a new
project in Peru, in 2010. Of those that
Minas FOB Indonesia FO 180 FOB Spore
LNG Japan/Korea Marker
16-Jun 30-Jun 14-Jul 28-Jul 11-Aug 25-Aug 8-Sep 22-Sep
November 2009 insight 23
liquefied natural gas
have started, some have ramped up pro-
duction slowly, but could be at full ca-
pacity in 2010. And it is possible that
production problems in Algeria and Ni-
geria could be resolved by 2010, adding
further supply.
Takayuki Nogami at JOGMEC says
that with “the new supplies coming on,
in addition to those which started this
year, LNG fundamentals will be quite
anemic in 2010, too.” He sees spot gas
prices in the US and UK in “a low range
of $3.00-5.00/MMBtu,” with spot LNG
“somewhat at the same level as natural
gas spot prices in the US and UK, re-
flecting weak fundamentals.”
The problem is that the new LNG
coming in has to go somewhere, and
the traditional markets are already
struggling to absorb the excess this
year, before the new wave really im-
pacts. There are new terminals, such
as those in China and India, and new
floating terminals in Kuwait and South
America. But these may not make much
of a difference. Purvin & Gertz’ Holmes
says the new terminals are “marginal.”
He adds: “What’s coming on in produc-
tion far outweighs that. There’s tens of
millions of tons coming on.”
Some of the excess in 2009 has head-
ed to Europe, and that trend could
continue in 2010. But Europe began
2009 with low LNG storage levels af-
4. Fuel oil vs term, spot LNG.
FO 180 FOB Spore LNG Japan/Korea Spot Crg DES
14
12
10
$/MMBtu
24-Mar 7-Apr 21-Apr 5-May 19-May 2-Jun
Source: Platts
24 insight November 2009
ter Russian pipeline gas flows through
Ukraine were cut in the winter. That
created a widespread need for gas
throughout the summer, but there’s no
guarantee that the same circumstances
will occur in 2010.
And for Europe to take any more
gas, pipeline suppliers would need to
cede market space to LNG producers,
with little obvious incentive. The Eu-
ropean suppliers provide gas on con-
tracts linked to oil prices, which have
remained comparatively high relative
to spot gas, while any excess LNG head-
ing to the continent would have to take
the relevant hub prices. In a contest be-
tween the two supply sources, the home
team will have the advantage.
But instead, several commentators
think the bulk of any 2010 excess will
head to the US, where there is ample
spare import capacity. Harris says that
if the supply that had been expected
had appeared this year, “we would
have seen much more of it go to the
US.” “With the startup of new projects
in the months ahead, we should see
much more go to the US,” he adds.
The US also has a more diffuse and
flexible domestic gas market. “At the
end of the day, the US has the largest
most liquid storage capacity to take it,”
says Keith Barnett at Merrill Lynch.
“And it also has the shortest investment
S Korea LNG average import price
16-Jun 30-Jun 14-Jul 28-Jul 11-Aug 25-Aug 8-Sep 22-Sep

cycles for [exploration and production].
So LNG sellers can pummel the US pro-
ducers for a year or two, and then the
producers can pick up the pieces af-
ter that. For these billion-dollar LNG
projects, you can’t really turn them
around—it’s like a supertanker versus a
Smart car.”
For excess LNG in 2010 to head to the
US, either European import capacity
would have to be full, or prices would
have to favor the west Atlantic. Particu-
larly during the summer, import capac-
ity is unlikely to be fully used, which
leaves price incentives as the likely mo-
tivator. And that means that the price
for excess LNG worldwide would be set
by Henry Hub values.
NYMEX futures have already fallen
significantly in the last year and more,
dropping steadily from the $13.577/
MMBtu high recorded on July 3, 2008.
At the time of writing (early October)
front month futures had recovered
from the September lows of mid 2s to
hit $4.00/MMBtu, but this is still a rela-
tively low number.
Could NYMEX prices recover in the
year ahead? One factor that analysts
have focused on is the US drilling rate,
which has declined in 2009 as prices
have fallen back. The theory is that
that will mean lower production and
hence higher prices. “Many analysts
5. NBP Winters in $/MMBtu as a percentage of Dated Brent.
Winter 10/11
30
25
20
15
10
1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09
Source: Platts
liquefied natural gas
are putting their hopes on that, that
it will push prices up to $7.00/MMB-
tu in the last half of 2010,” says Keith
Barnett. But he adds: “I’m not one of
those people.” He points out that as
domestic producers pull back, LNG
moves in. And LNG producers may be
willing to accept extremely low prices
before they blink.
Unlike unconventional gas produc-
tion in the US, much of which is dry,
non-associated shale gas, LNG pro-
duction worldwide is often associated
with liquids production. Because those
liquids—condensate and LPG—attract
relatively high prices compared with
methane, the projects can keep pro-
ducing even when they receive little
income for the LNG itself. For projects
such as Qatar’s RasGas and Qatargas,
and Australia’s North West Shelf, it is as
if LNG production had zero cost.
“Essentially shipping is the margin-
al cost, so prices can be pushed down
quite low before there’s any incentive
to stop producing,” Chris Holmes at
Purvin & Gertz says. Just how low is
“quite low”? “If Henry Hub went below
$2.00/MMBtu, you would struggle to
send LNG to the US, certainly from the
Middle East,” he says.
A floor of $2.00/MMBtu may be scant
comfort to producers, and there is more
bad news on the upside. Although US
Winter 09/10
November 2009 insight 25
liquefied natural gas
gas producers have been pushing pro-
duction back, analysts say the trend of
late has been to drill wells in prepara-
tion for any market turnaround. Bar-
nett says: “There are as many as 1,000
wells that have not been completed, and
could be started up in as little as three
months. They’re drilled and cased, but
not perforated and fractured.” Any US
price rise would likely be met by a rapid
production response, likely keeping a
lid on prices.
So hub prices are likely to remain in
the $2.00-4.00/MMBtu range we have
seen this year. Spot LNG prices in Asia
Pacific might be somewhat above that
if there were localized demand, but few
analysts see potential for spot LNG to
climb back to even early 2009 levels.
JOGMEC’s Takayuki Nogami says there
is a “low probability of prices at $7.00-
8.00/MMBtu, barring a severe winter
storm,” while CERA’s John Harris says
Asian LNG prices will be “between
Henry Hub and oil.”
The 2010 price picture therefore looks
like a reproduction of 2009, but with
different drivers. Whereas this year saw
a collapse in demand pushing prices
lower, the following year will see sup-
ply pressuring prices. Any uptick in de-
mand in Asia Pacific is likely to be eas-
ily met by the increase in LNG supplies,
with buyers bidding against a weak
Henry Hub price, and any unmet At-
lantic demand fed by the uncompleted
US wells.
That outlook could hold true beyond
2010. Andrew Pearson at Wood Mack-
enzie says that for the Pacific basin “our
view is that the market should stay soft
for the next few years, until the new
wave of supply, currently coming on-
stream, is absorbed into the market.”
There is a postscript to that picture,
however. While spot LNG prices have
bounced along a bottom in 2009,
producers selling LNG on long-term
contracts have had the benefit of oil
indexation. Nogami says that if crude
prices fell back to $40-50/barrel, term
LNG prices would be $7.00-8.00/
MMBtu. But if they maintain “their
current momentum,” prices would
rise to $10.00/MMBtu.
26 insight November 2009
LNG projects tend to sell most out-
put under term contracts, so the low
price environment will not be hitting
LNG producers as much as might be
expected, and certainly not as much
as those US producers who take Henry
Hub pricing.
But that disconnect between spot
and term LNG pricing may have an
impact beyond the current downturn.
Pearson points out that the last few
years saw very few LNG projects sanc-
tioned, whereas this year and next
“look more encouraging.” Australia’s
giant Gorgon project has already been
sanctioned in 2009, while a string of
LNG projects in Papua New Guinea
and several coal seam gas-based proj-
ects in Australia are heading towards
fi nal investment decisions in the next
year or so.
Pearson says that the first wave of this
new supply will still attract “close to oil
parity pricing, probably around 14-15%
of JCC,” referring to the Japanese Crude
Cocktail benchmark. But it will be “the
projects at the back end of the supply
curve which will be put under pressure
as the competition is intense and there
is insufficient market for all the vol-
ume,” he says.
There are already reports that one re-
cent contract has been signed with an
“s-curve shape” to protect the buyers
at oil prices not too much more than
the current price. “This is evidence
that the pendulum is swinging back
towards the buyers after many years
of a suppliers’ market,” says Pearson.
“With this, everything is up for grabs.
There’s a lot more leverage for buyers
to dictate whether they buy DES or
FOB, include caps or floors, and po-
tentially even take a stake in the sup-
ply project.”
With buyers facing yet another year
of paying close to oil prices for long-
term supplies of LNG while spot prices
reflect weak fundamentals, any in-
crease in their power is likely to mean
a significant shift towards flexibility
and a weaker oil linkage. And because
of the long lifecycle of LNG projects,
that shift will affect the market for de-
cades to come. ■
renewables
New Renewable
Energy Markets Take
Shape Across Asia
David R. Jones, Editor, Platts Renewable Energy Report
The rush to develop renewable ener-
gy in Asia that gathered steam in 2009
seems set to continue in 2010, with
China spearheading the drive while
other Asian countries stake their claims
in the market.
China is by far the region’s largest
renewable energy producer, and the
nation’s leaders have affirmed their
commitment to expanding renewables
production. China has set the target
of securing 15% of its energy capac-
ity from renewable resources by 2020,
including 100 gigawatts (GW) of wind
power, with Premier Wen Jiabao saying
in 2009 that the government should
establish a broad strategy to foster the
wind power industry.
The potential for renewables expan-
sion is certainly abundant. China in
2008 doubled its wind energy capacity
for the fourth straight year, bringing
national capacity to 12.15 GW.
The State Grid Corporation of China
(SGCC), the larger of China’s two elec-
tric transmission and distribution com-
panies, has higher expectations of wind
power. It forecasts that the nation’s
wind power generation capacity will
increase to 35 GW by 2010 and to 150
GW by 2020, while solar power capac-
ity will increase to 1 GW by 2010 and
20 GW by 2020.
Altogether, China’s wind, solar and
nuclear power capacity will provide
more than 16% of the country’s elec-
28 insight November 2009
tricity by the end of the next decade,
the SGCC said.
Other organizations also are project-
ing continued growth in China’s renew-
ables sector. The Global Wind Energy
Council, for instance, expects China to
soon overtake the United States as the
world leader in wind power capacity.
Solar power, including solar thermal
and solar photovoltaic (PV) generation,
is also thriving in China. The coun-
try currently is tied for second place
in Ernst & Young’s Renewable Energy
Country Indices, a leading indicator of
renewables investment climates, hav-
ing gained several points in the E&Y
rankings in 2009.
“This represents a marked move by
the Chinese authorities to support do-
mestic PV generation, with 2020 targets
for solar power rising to 9 GW, which is
75 times the current solar capacity of
about 120 MW. Support of PV within
the sector will also strengthen the Chi-
nese solar cell supply chain, which cur-
rently relies on exports for the vast ma-
jority of its revenues,” according to the
E&Y index.
Barriers to development remain,
however. The country’s legislature, the
National People’s Congress, is consid-
ering a draft amendment “in a bid to
remove the power transmission bottle-
neck that hinders industrial develop-
ment,” the official People’s Daily On-
line site reported. “The draft requires

related ministries to map out concrete
plans for meeting the country’s me-
dium-term and long-term renewable
energy targets, which should be based
on the overall national energy strategy
and available technologies.”
In some areas of China, infrastructure
is lacking to incorporate new renewable
electricity generation. The People’s Daily
Online, citing reports from the China
Wind Energy Association, said that “more
than 20% of the country’s wind power
machines did not generate any electric-
ity last year because the equipment was
not yet connected to the grid.”
The draft law would also establish a
nationwide annual purchase quota for
renewable energy sources to protect
the interests of renewable energy en-
terprises, and calls for the creation of a
government fund to support research
and development on renewable ener-
gy-related technologies and a smart-
grid system.
India comes a distant second to Chi-
na among Asian renewables markets.
Still, it boasts abundant clean energy
resources, and the government is look-
ing to vastly expand its renewable ener-
gy generation as part of the solution to
acute nationwide power shortages. In-
dia currently has nearly 15 GW of grid-
connected renewable energy plants and
another 322 MW of off-grid and dis-
tributed generation systems.
Solar power could be the country’s
next boom market. India would pro-
duce 20 GW of solar energy by 2020 as
part of the country’s strategy to tackle
climate change, under a policy endorsed
by a top government committee.
The Prime Minister’s Council for Cli-
mate Change has approved the 20-GW
target for solar power generation over
the next 11 years, and the council is
looking at still more ambitious goals to
further increase solar power use in the
coming decades. Currently, the country
has just 5 MW of off-grid and grid-con-
nected solar photovoltaic power.
Adoption of the 2020 solar energy tar-
get follows the creation of the National
Solar Mission by the council in 2008
as one of eight missions in India’s Na-
tional Action Plan on Climate Change.
renewables
The 20-GW solar target goes far beyond
the 1-GW goal for 2017 proposed earlier
under the mission.
The National Action Plan’s solar mis-
sion calls for the tapping of solar ther-
mal power and solar PV to take advan-
tage of India’s plentiful sunshine, and
notes that most parts of India experi-
ence clear, sunny weather 250-300 days
a year. Solar energy can provide both
utility-scale power production and de-
centralized, village-level generation,
which would cut losses from long-dis-
tance electricity transmission.
“Where necessary for purposes of
system balance or ensuring cost-effec-
tiveness and reliability, it would also
promote the integration of other renew-
able energy technologies, for example
biomass and wind, with solar energy
options,” according to the plan. The
strategy also called for research and de-
velopment investment to increase the
efficiency of solar cells and “improve-
ments in PV module technology with
higher packing density and suitability
for solar roofs.”
The Prime Minister’s Council cur-
rently is drafting a detailed plan which
has the target of generating 1-1.5 GW
by 2012, 6-7 GW by 2017 and 20 GW
by 2020. It is expected to initially fo-
cus on deploying solar rooftop and on-
site solar PV arrays on government and
public sector enterprise buildings, and
using vacant lands at power plants.
Key trends in Asia for 2010
◆ Continued acceleration of renewables
in China
◆ Growth of wind and solar power in India
◆ Emergence of Australia, and
re-emergence of Japan, as magnets
for renewables investment
◆ Growing interest in wind power and
biomass in southeast Asia
November 2009 insight 29
renewables

Additionally, a new analysis co-au- Indian Wind Turbine Manufacturer As-

thored by the Global Wind Energy Coun- sociation, noted that the nation ranks
cil found that the country has at least fifth worldwide in installed wind ca-
48.5 GW of wind energy potential—and pacity and has a strong wind-turbine
that through repowering old wind tur- manufacturing base, with domestic
bines with new ones and making more producer Suzlon joined in recent years
land available for wind farms, India by foreign companies. Wind power de-
could reach 100 GW of wind power. velopment in India has been fostered
The study, Indian Wind Energy Out- by strong state government support
look 2009, written by GWEC and the measures, such as feed-in tariffs and re-
newable portfolio standards.
But “at the moment there is no coher-
Table 1. India new and renewable energy. ent national renewable energy policy to
drive the development of wind energy,”
Cumulative achievements as of July 31, 2009 the study said. “This is urgently needed
to realize the country’s full potential
Sources / Systems Achievements during Cumulative Achievements
2009-10 (up to July 31) and reap the benefits for both the envi-
ronment and the economy.”
Power From Renewables
Among the region’s other leading
Grid-connected renewable power economies, Australia and Japan are pre-
Biomass Power (Agro residues) 70 MW 773.3 MW paring to make major pushes in 2010
Wind Power 222 MW 10.464 GW to develop renewable energy. Australia
Small Hydro Power (up to 25 MW) 31 MW 2.461 GW
has long been the region’s slacker in re-
newables promotion, but that is about
Cogeneration-bagasse 106 MW 1.155 GW
to change.
Waste to Energy – 59 MW The country’s renewable energy in-
Solar Power 2 MW dustry is set for a huge boost after Par-
Sub Total (in MW) 429 MW 14.914 GW liament passed legislation in 2009 set-
Off-grid/Distributed Renewable
ting a 20% renewable energy target for
Power (including Captive/CHP plants) 2020. The new law is expected to gener-
Biomass Power / Cogen.(non-bagasse) 5 MW 175.78 MW
ate up to A$28 billion ($24 billion) of
investment in renewable energy supply
Biomass Gasifier 1.56 MWeq. 107.02 MWeq
and create 28,000 jobs, the country’s
Waste-to- Energy – 34.06 MWeq Clean Energy Council estimates. Aus-
Solar PV Power Plants and Street Lights – 5 MWp tralia currently generates about 8% of
Aero-Generators/Hybrid Systems – 0.89 MW its electricity from renewables.
Sub Total 6.56 MWeq 322.75 MWeq
The new targets will come into force
from next year, with the 2010 target
Total (Grid and Off-grid) 435.56 MW 15.236.75 GW
increasing to 12,500 GWh from 9,500
Remote Village Electrification Villages/Hamlets 4297 villages + 1156 hamlets GWh, rising to 45,850 GWh in 2020,
Decentralized Energy Systems and remaining at 45,000 GWh from
Family Type Biogas Plants 0.03 lakh 41.27 lakh 2021 to 2030. As under Australia’s pre-
Home Lighting System – 4,50,000 nos.
vious renewables legislation, generators
of power from such renewable sources
Solar Lantern – 7,30,000 nos.
as wind, solar, hydroelectricity and
SPV Pumps – 7,148 nos. geothermal will receive one Renewable
Solar Water Heating – Collector Area – 2.90 Mln. sq.m. Energy Certificate (REC) for each MWh
Solar Cookers – 6.57 lakh of power they produce.
Wind Pumps – 1347 nos.
Selling RECs to regulated companies
such as power retailers, which are re-
Other Programs
quired to surrender a certain number
Energy Parks – 511 nos. of RECs each year, will provide renew-
Akshay Urja Shops – 284 nos. ables generators with an additional rev-
Note: MWeq. = Megawatt equivalent; kWp = kilowatt peak; sq. m. = square meter; 1 lakh = 100,000, nos. = number of units. enue stream. The penalty for regulated
Source: India Ministry of New and Renewable Energy energy companies that fail to surren-

30 insight November 2009


der the required number of RECs rises
to A$65/MWh, up from the current
A$40/MWh.
Australia’s biggest green energy pro-
ducer, Origin Energy, welcomed the
new legislation.
“Along with the carbon pollution re-
duction scheme and the right support
for investment in electricity transmis-
sion, the [renewables] scheme will be an
important factor in whether companies
invest in the infrastructure required to
deliver carbon emissions reductions in
Australia,” Origin Executive General
Manager, Policy and Sustainability, Carl
McCamish said.
Some companies are acting quickly to
cash in on the Australian market. Aus-
tralian pension funds manager Indus-
try Funds Management, for example,
has started the process of selling a non-
controlling interest in renewable ener-
gy producer Pacific Hydro as it seeks to
raise funds to accelerate development
of Pacific Hydro’s pipeline of wind and
hydropower projects. It said passage of
Australia’s new renewables target is one
of the drivers for the timing of the sale,
given the large investment required to
meet the goal.
“With the passage of the renewable
energy target in Australia there’s an
investment opportunity of circa 12
GW of electricity between now and
2020,” the company said. “It’s prob-
ably unlikely that any single entity
could meet that investment challenge,
but certainly Pacific Hydro is keen to
participate in that opportunity to the
full extent possible.”
Japan, once a global pace-setter in re-
newable energy technology, has slipped
in recent years. It now ranks 21st in the
E&Y renewables country index, tying
with Turkey and behind countries like
Poland and Belgium.
Yet just as Australia emerged as a poten-
tially lucrative renewables market with
new legislation in 2009, Japan could be
ready to re-assert its market leadership
role in 2010. The Democratic Party of Ja-
pan’s landslide victory in the country’s
August 2009 elections could mark a new
beginning for Japanese renewable-ener-
gy and carbon-emissions policies.
renewables
The DPJ’s election manifesto high-
lights a range of specific initiatives the
party will pursue to promote renewable
energy production, foster development
of clean-energy technologies and slash
greenhouse gas emissions. The party,
for instance, intends to “fast-track the
introduction of a fixed-price purchase
system that requires power companies
to purchase the entire output of renew-
able energy generation (not just surplus
power), and promote the development
and diffusion of ‘smart’ electricity grid
technologies.” The goal will be to boost
the ratio of renewable energy in Japan’s
total primary energy supply to about
10% by 2020.
The DPJ also will introduce legislation
to subsidize purchases of solar panels for
residential homes and other buildings as
well as so-called green vehicles and ener-
gy-saving appliances. Further, the party’s
platform calls for making Japan the world
leader in environmental technologies. It
has vowed to promote research and de-
velopment and commercialization of
such technologies as fuel cells, supercon-
ductivity and biomass generation.
Beyond Asia’s major economies, there
are signs that countries throughout the
region are starting to deploy renewables
based on their domestic resources, ac-
cording to E&Y partner Ben Warren.
“There is biomass and bioenergy in
the tropical parts of Asia, there is wind
energy in the Philippines and Thailand.
They are interesting markets in their
own right,” he said in an interview.
Across Asia, renewable energy develop-
ment is gathering speed as countries seek
to ensure security of energy supplies and
tackle climate change. Few countries in
the region can tap significant oil or nat-
ural gas supplies, and only China, India,
Indonesia and Australia rank as major
coal producers. Even where fossil-fuel re-
sources are available, concerns about cli-
mate change continue to mount as more
extreme weather events batter nations
like Indonesia and the Philippines.
All told, the global clamor for action
on climate change is starting to trump
the unfettered use of fossil fuels, and
renewable energy stands poised to reap
the benefits in Asia as elsewhere. ■
November 2009 insight 31
 The Outlook for Sustainability
Charting a Course Amidst
Economic, Geopolitical and
Environmental Challenges
3rd Annual December 2, 2009

platts Global Energy Outlook Forum

The Hon. Steven Koonin, Under
Secretary for Science,
U.S. Department of Energy
Keynote
Pedro Azagra,
Chief Development Officer,
Iberdrola
Roberta Bowman,
Senior Vice President and
Chief Sustainability Officer,
Duke Energy
Vincent de Rivaz,
Chief Executive Officer,
EDF Energy
Curt L. Hébert, Jr.,
Executive Vice President, External
Affairs, Entergy Corp
John Kingston,
Global Director of Oil, Platts
Michael Mandel,
Chief Economist, BusinessWeek
Charting a Course Amidst Economic, Geopolitical
Micheal F. Mansfield, Sr.,
Chief Executive Officer
Mansfield Oil Company
Robert Murray,
Vice President, Economic Affairs,
McGraw-Hill Construction
Larry Neal,
President, Platts
James L. Parish,
Executive Vice President, Energy
Solutions and LEAN Transformations,
RWD Technologies (Chair)
Russ Stepp,
President of R.W. Beck,
an SAIC Company
The Outlook for Sustainability:
and Environmental Challenges
December 2, 2009
1221 Avenue of the Americas
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The Hon. Steven Koonin, Under Secretary for
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The Outlook for Sustainability—Economic
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and oil supply.
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Successful industry executives will share their
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by the preceding economic panel. This session
is where “the rubber meets the road” and
first-hand insight into how some executives
are preparing their companies for the future.

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Fellow, Energy and National
Security Program, Center for
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As World Mopes,
India Invests in Itself
Vandana Hari, Asia News Director, Platts, Singapore
A 580,000 barrels a day (b/d) state-of-
the-art refinery is brought on stream, a
$1 billion petrochemical project ties up
funding, a Rajasthan onshore field be-
gins pumping crude, a giant deepwater
gas field starts production and is quickly
on its way to hitting targeted output, an
LNG import terminal nearly doubles ca-
pacity and term LNG imports jump 50%
to 7.5 million metric tons (mt) per year.
While the developed world tightened
its purse strings and almost ground to
a halt in 2009, India’s petroleum sector
came out to play—ignoring the reces-
sion and preparing for the years ahead.
This is also where India’s path di-
verged from that of its formidable Asian
competitor China. While Beijing went
on a major shopping spree for energy
assets around the world, India invested
in itself.
2009 was the year India gave itself the
world’s cheapest car. Ashok Raghunath
Vichare, a resident of Mumbai, received
the keys to the first Nano from none
other than Ratan Tata, the chairman
of the Tata group, on July 17. A month
later, the $2,000 car got a thumbs-up
from its owner, who said he had done
up to 100 kilometers per hour on the
highway and squeezed out 24 km from
a liter of gasoline.
Some 100,000 aspiring owners were
selected by ballot to be the first recipi-
ents of the Nano. Those not on that list
can expect to wait through 2011 to take
delivery of their automobile.
Tata, India’s largest automobile man-
ufacturer, sold 47,126 vehicles in the
India
domestic market in August, a 21.4%
increase from August 2008. The com-
pany’s exports, in contrast, slumped
nearly 78% on year.
India’s gasoline demand over January-
August was 13.7% higher than the cor-
responding period of 2008 at a cumula-
tive 8.32 million mt, no doubt helped
by cheaper car loans and government
stimulus packages.
But importantly, consumption of gas-
oil, an important indicator of indus-
trial and agricultural activity, was 7.7%
higher year on year in the first eight
months of 2009 at 36.54 million mt.
Overall refined products demand
to the end of August was 3.2% higher
than a year ago, according to latest oil
ministry data.
Early in the year, private refi ning
and petrochemicals giant Reliance
Industries Limited (RIL) decided to
place its bets on the domestic mar-
ket by asking the government to end
the “export-oriented unit” status of
its 660,000 b/d Jamnagar refi nery in
mid-April, nearly a year before it was
due to expire.
Losing EOU status made RIL liable to
pay import taxes and other levies on
crude bought overseas for processing at
the plant, but more importantly, also
enabled it to sell refined product in the
domestic market without attracting im-
port duties.
The company’s new 580,000 b/d re-
finery at Jamnagar is sited in a “special
economic zone,” which means it is re-
quired to export all its products in re-
November 2009 insight 33
India
turn for fiscal incentives from the cen-
tral government.
Essar Oil, India’s only other private
refiner, took down its 210,000 b/d Va-
dinar refinery in April to raise its capac-
ity to 280,000 b/d. Though the Vadinar
refinery continued to export some of
its output, Essar Oil also embraced the
domestic market in a bigger way, tying
up the bulk of its output in term sales
with the three state-owned marketers
Indian Oil Corp. (IOC), Bharat Petro-
leum Corp. Limited, and Hindustan Pe-
troleum Corp. Limited.
Exports accounted for only 12% of
Vadinar’s product sales in the April-
June quarter, compared with 30% a
year ago.
The company, which exited domes-
tic retail marketing in 2007 as rising
crude prices and domestic fuel subsidies
snuffed out margins, had reopened all
1,276 of its retail stations by mid-2009,
and announced plans to grow the num-
ber to 1,500 by March 2010, the end of
the current financial year.
Essar Oil is spending $1.56 billion to
expand Vadinar’s capacity to 320,000
b/d by December 2010 and has said it
sees a “ready domestic market” to ab-
sorb all the incremental production.
State-owned refiners, which dominate
the refining and marketing sector in In-
dia, are also in an expansionary phase.
The largest among them, IOC, is
scheduled to increase its Haldia refinery
capacity in West Bengal to 150,000 b/d
from 120,000 b/d by December or Janu-
ary 2010 and its Panipat refinery in the
northern state of Haryana to 300,000
b/d from 240,000 b/d by December.
BPCL expanded its Kochi refinery ca-
pacity in Kerala state to 190,000 b/d from
150,000 b/d in August. It has also set up
a 120,000 b/d greenfield refinery at Bina
in Madhya Pradesh state in partnership
with Oman Oil Company, which is near-
ly complete and set for commissioning
through the first half of 2010.
With Indian products demand con-
tinuing to grow modestly while export
markets remained in the doldrums,
refi ned product exports from the
country shrank, but so did imports—
a reflection of more barrels from the
34 insight November 2009
export-oriented refiners fi nding home
in the domestic market.
January-August exports slumped
27.3% on year to 17.98 million mt. Prod-
uct imports in the same eight months
dropped 30.38% to 9.99 million mt.
Indian refiners maintained average
overall capacity utilization rates well
above 100% in 2009, in sharp contrast
to most of their peers in Asia.
Though Indian refiners are riding on
the back of a strong demand growth in
gasoil and gasoline, which account for
40% and 9% of the country’s total prod-
ucts consumption respectively, they are
increasingly in a quandary over the
growing surplus of naphtha.
Exports of the light distillate have
become tougher in the face of dramat-
ic declines in consumption by petro-
chemical producers in countries such
as Japan, South Korea and Taiwan.
India’s naphtha consumption in the
first eight months of 2009 at roughly
8.36 million mt was 7.8% lower than
the corresponding period a year ago,
largely due to gas substitution.
Downstream petrochemical projects
in the pipeline would start absorbing
some of the country’s surplus naphtha,
but only after two to three years.
Among the few immediate expan-
sions on the anvil are Haldia Petro-
chemicals, which is set to debottleneck
its West Bengal facility through the
end of 2009 to raise its naphtha crack-
ing capacity to 675,000 mt/year from
520,000 mt/year.
IOC is setting up a petrochemicals
complex based on a naphtha-fed steam
cracker as part of its Panipat refinery
expansion project in Haryana state,
which is expected to go into commer-
cial production in 2010. The cracker,
with an ethylene capacity of 860,000
mt/year, is expected to use naphtha
feedstock from the Panipat refinery as
well as IOC’s Mathura refinery in the
nearby Uttar Pradesh state and Koyali
refinery in Gujarat.
The other projects are further out.
For instance Brahmaputra Cracker and
Polymer Limited’s grassroots gas and
naphtha-based petrochemical project
in Assam state achieved financial clo-

sure in October, and is expected to use
up 160,000 mt/year of naphtha when it
goes on stream in April 2012.
India’s gas supply dynamics changed
even more dramatically than the refin-
ing scenario this year, with the start-
up of the deepwater D6 block in the
Krishna Godavari Basin off the coun-
try’s east coast.
Operator RIL began pumping gas from
D6 in April and had crossed the 1 Bcf/
day mark within three months. Output
from the block is tipped to reach a peak
of 2.8 Bcf/d by the end of 2009 or in
early 2010, nearly doubling national
gas production.
Another landmark upstream devel-
opment was the start of oil production
from Cairn India’s Rajasthan block—
the first onshore oil discovery in the
country in two decades. The company
began pumping sweet, waxy crude from
the Mangala field in the RJ-ON-90/1
block on August 29. Output from the
first three fields to be developed in the
block is expected to peak at 175,000 b/d
in the first half of 2011, or about 8.75
million mt/year, boosting the country’s
current and largely stagnant produc-
tion of about 34 million mt/year by
nearly 25%.
Even with substantial new D6 gas vol-
umes flowing to the power and fertiliz-
er producers—the priority sectors iden-
tified by the government to receive the
initial volumes—India’s LNG imports
hit an all-time high of 1.168 million
mt in August. The purchase represent-
ed a 44% leap from both the previous
month and August 2008.
Petronet LNG Limited, India’s maid-
en and largest LNG importer, complet-
ed an expansion of its 6.5 million mt/
year Dahej import and regasification
terminal on the country’s west coast in
March to a new maximum capacity of
11.5 million mt/year. Starting Novem-
ber 2009, the company was preparing
to ship in 7.5 million mt/year of term
LNG from Qatar’s RasGas, up from the
current 5 million mt/year.
India also imports spot LNG through
Dahej, and Shell’s Hazira terminal on
the west coast. A third LNG import
terminal, at Dabhol on the west coast,
India
is preparing for commissioning in the
coming months, and has offered the
1.5 million mt/year capacity it will have
available initially on a tolling basis.
The only setback clouding a year of
successes was a flopped upstream bid-
ding round. New Delhi offered a record
70 exploration blocks under the eighth
round of its New Exploration Licensing
Policy launched in April. The interna-
tional bidding round closed October 12
with bids coming in for only 36 blocks
and the international majors India has
been trying hard to woo largely con-
tinuing to stay away.
In contrast, the last round of up-
stream bidding in 2008, NELP VII, had
attracted bids for 45 of the 57 blocks on
offer. The bids totaled 181, compared
with just 76 this year.
Top officials in the oil ministry and
the upstream regulator, the Director-
ate General of Hydrocarbons, did not
hide their disappointment and rallied
their own reasons for the failure. These
included the global credit crunch and
international oil companies expressing
interest in development projects rather
than exploration blocks.
But the single biggest factor casting
a shadow on the bidding round was in
all likelihood the ongoing legal battle
between RIL and Reliance Natural Re-
sources Limited over D6 gas supplies
and lack of clarity on the government’s
role in setting gas prices and deciding
the country’s gas utilization policy. The
price of D6 gas was set following ap-
proval by a senior ministerial group in
September 2007 with the same group
picking the buyers for the first 1.4 Bcf/
day of D6 production.
Though crude production in India
is sold at international market prices,
natural gas is bound to take a more
gradual and meandering path to liber-
alization, thanks to the fertilizer and
power sectors. These require feedstock
at discounted prices because of the cap
on their own selling prices.
India’s ability to manage interna-
tional perceptions through the transi-
tion phase will be key in its ambition
to bring larger areas of its sedimentary
basins under exploration. ■
November 2009 insight 35
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India: Stalking an Asian
Coal Revolution
James O’Connell, Managing Editor, Platts International Coal Report
2009 saw India emerge as a major
player in the international coal mar-
kets. No longer hiding behind the skirts
of state-owned monopolies, imports
are soaring in tandem with demand.
No longer tied exclusively to the apron
strings of the traditional supply routes
from Indonesia and Australia, it is vo-
raciously eyeing new markets. There’s a
change a-coming and old players such
as Europe had better watch out.
While much of the rest of the world
suffered economic stagnation or de-
cline from 2008, India struggled to
comprehend what the fuss was all
about. Booming industries such as steel
powered double-digit growth, while
the only blot on the landscape was if
fuel supplies could be guaranteed while
keeping costs under control.
Long in the shadow of China’s dragon,
India’s tiger has finally begun to present
its claws and make its presence felt.
As with any emerging power, India
is not trouble free. It is weighed down
with infrastructural constraints, out-
of-date procurement systems and over-
ly ambitious plans, especially in the
power generation field, which will see a
growing dependence on imported coal
in the decades ahead.
Major Opportunity for Private Players
India has massive reserves of coal,
over 250 billion metric tons (mt), but
it is of average quality and usually re-
quires blending with imported coal to
generate power. Sudhir Nair, the head
of energy and infrastructure at CRISIL
Research, has projected that by 2013-
coal
2014 India will be the world’s second
largest importer of coal, behind only
Japan, and will require 117 million mt
of thermal and 52 million mt of coking
coal imports.
Nair noted that these figures are based
on the projection that 80% of capacity
additions in the power sector will in-
volve coal-fired plants. Coal will fuel
54 GW out of the 66 GW of total capac-
ity CRISIL believes will be developed by
March 2014.
Nair forecast that this will result in
254 million mt of incremental coal de-
mand by 2013-2014. He also assumed
that the state-controlled local producer
Coal India Ltd will meet its production
target of 588 million mt for that year,
leading to the import projection.
The Mumbai-based specialist suggest-
ed that, rather than being government
led, private enterprises will be the main
importers with the majority of imports
coming from Indonesia. Nair pointed
to tie-ups such as Reliance Power’s In-
donesian acquisitions, using Krishna-
patnam port, Essar Power importing
through Salaya port, and both Tata
Power and Adani Power importing In-
donesian coal through Mundra port for
their large-scale power projects.
He went on to project that western
ports would take the lion’s share of
coal traffic, accounting for 116 million
mt in 2013-2014. Of this, 83% would
consist of thermal coal and 17% coking
coal. Meanwhile eastern ports would
account for some 86 million mt, with
a higher concentration of coking coal
at 38%. These figures include some
November 2009 insight 37
coal
33 million mt of domestic production
moving internally between ports.
There are obstacles to the process,
with Nair pointing out that substan-
tial port developments are required to
handle the projected increase in coal
imports. He said that minor ports in
Orissa (Dhamra 15 million mt capacity,
Ashtaranga 12.5 million mt and Kirta-
nia 10 million mt) and Gujarat (Mundra
12 million mt and Pipavav 10 million
mt) are likely to play a central role in
the process of adding some 93 million
mt of annual coal-handling capacity by
March 2014.
Meanwhile major ports are expected
to add 35 million mt to their existing
capacity by 2013-14 to keep pace with
import expectations. Obstacles to such
development are the amount of capital
required and possible government in-
tervention regarding the minor ports,
Nair observed, adding that the capac-
ity additions would require coal-related
investment at minor ports of Rupee
169 billion ($3.61 billion) and at major
ports of Rupee 14.8 billion.
The message that Indian dependence
on and demand for imported coal is set
to rise in future decades was repeated
by RV Shahi, chairman of Indian logis-
tics company Infratech.
Shahi, a 35-year veteran of India’s
power sector, said the country could
not depend on domestic coal produc-
tion alone to sustain its massive power
generation expansion program—in-
stalled capacity is projected to surge to
1. India energy breakdown.
Imported coal 1%
Domestic coal 55%
Source: Government of India
38 insight November 2009
800 GW by 2032-35. Analysis by his
company showed that, even with the
best intentions regarding the harness-
ing of renewable energy resources, coal-
fired plants would still account for 48%
to 60% of India’s electricity generation
by 2032.
“Dependence on [coal] imports has
risen to about 5% of total production
and this proportion will increase,”
Shahi said. Indian domestic mines cur-
rently produce about 480 million mt/
year, meaning thermal coal imports are
about 25 million mt/year.
The coal supply situation facing In-
dian power stations had become “criti-
cal” with an increasing number of In-
dian power plants having only three to
seven days of stocks. This means that
they operate on a “crisis management
basis,” he said.
Shahi added that “the private and
state sectors have been advised to ac-
quire coal mines abroad. That process
will help India but we must not be com-
placent with that,” he stated.
Another issue is the high ash content
of Indian domestic coal, at up to 45%,
which makes it unsuitable for power
generation without washing. “The coal
supply to Indian power stations is some
of the worst in the world. The coal
washing process must be accelerated
in the state and private power sectors,”
said Shahi.
He also mentioned other issues facing
India’s domestic coal industry. These in-
clude difficulties over land acquisition
Hydro 25%
Oil 1%
Natural gas 10%
Nuclear 3%
Renewable 5%

for coal projects, infrastructure gaps
and high production costs. “Land titles
are not so clear, leading to development
being a risky proposition,” he said.
India Pounces on European Stronghold
Softer free on board (FOB) prices and a
decline in overall international demand
have seen South African production be-
come more attractive to Indian traders.
The key export terminal of Richard Bay
is no longer exclusively a happy hunt-
ing ground for European coal consum-
ers who now face competition.
South African coal players are already
looking east and the country has be-
come a leading exporter to India. South
Africa shipped 9 million mt to India in
the first half of 2009, some 32% of its
total exports of 28 million mt.
And more is available. In early Octo-
ber, an Asian coal trader said he was ap-
proached by several South African coal
traders interested in selling Richards
Bay FOB cargoes in Asia. “In the past,
usually, I’ll go to the supplier. I’ll go to
the miner and I’ll make an offer,” the
Asian trader said, adding: “But when
one starts getting unsolicited offers
from many of the traders or the middle-
men or the brokers, that is a sign to say
that there is a lot of coal in the market
to be sold.”
Given this situation, most industry
players would be surprised if prompt In-
dian demand would support a Richards
Bay FOB market that could come under
further pressure from increased sell-
ing in the latter part of 2009 and early
2010. With India’s monsoon season at
an end, demand for South African coal
in the country has been mounting but
buyers are still wary of overpaying for
spot material.
“The Indians are happy to wait for
prices they want, they will never chase
the market up and in this respect they
are very disciplined,” a Switzerland-
based trader noted. In this respect,
while South Africa offers India a new
market, Indonesia remains a corner-
stone of its supply.
India’s total import requirement for
2009 is estimated at 50 million mt,
much of it expected to come from In-
coal
donesia. In September Indonesia’s En-
ergy and Mineral Resources Minister
Purnomo Yusgiantoro said his country
had already shipped 13 million mt to
India in the year to date and confirmed
delivery of an additional 3 million mt
by the end of November.
But India’s coal-strapped power utili-
ties can be forgiven for being nervous
since Indonesia is expected to export
around 185 million mt to a wide range
of countries in 2009. “That means In-
dia’s [annualized] share in the exports
would be a little over 8%,” one indus-
try analyst said, adding: “Obviously,
the Indonesians [must] find the other
neighboring markets more attractive.”
Industry players are hopeful of an in-
crease in exports once the two countries
finalize a proposed working group on
coal which is expected to take shape in
early 2010. But coal shortages are already
biting into Indian power generation.
India’s Central Electricity Authority
has reported that power production
grew by 7.5% on year in September.
But NTPC Ltd., India’s largest power
generator, has indicated that growth of
9.8% could have been achieved if coal
supplies had been reliable. The gov-
ernment-controlled NTPC saw its load
factor fall at 12 out of its 14 coal-fired
plants between March and August, in
some cases by up to 33%.
The industry’s problems are illus-
trated by the travails of the largest im-
ported coal tender launched in India
to date, the tender for 12.5 million mt
first floated in May 2009 by the local
MMTC. At the time of writing [Octo-
ber 20] the tender remained unresolved
more than a month after the closing
date of September 16, an MMTC official
confirmed.
“The tender is still going on and
there hasn’t been any news yet. Offers
into it are valid for 90 days,” said the
official. This would mean offers into
the MMTC tender have validity until
December 15.
The imported coal is required over
a one-year delivery period by Indian
coal-fired power stations operated by
NTPC. The generator’s annual coal
consumption is currently about 116
November 2009 insight 39
coal
million mt/year, with 10% usually
sourced from overseas and used for
blending with local coal.
“All this shows a kind of convoluted
economics,” analyst Sujit Mitra said,
adding: “The government is taking
time to finalize the deal as it wants to
make sure that it gets the best price and
saves money. But in the process it has
created a situation when the country is
suffering losses.”
The Indian government’s plan-
ning commissioner, B K Chaturvedi,
has said that imports are not solely
responsible for the lack of growth in
coal supplies, with delays to the pro-
duction from domestic mines also a
major contributor. Only 25 of the 206
allocated coal blocks are currently in
production, he observed.
Chaturvedi also admitted that not
all of the 80 GW of generating capacity
projected for development in the gov-
ernment’s eleventh five-year plan, end-
ing March 2012, will be implemented.
He suggested that 60 GW to 75 GW is
“potentially achievable” but added that
the commissioning of part of this ca-
pacity will spill over into the next five-
year planning period.
2. Estimated non-coking coal production demand and imports.
900
800
700
Million metric tons
600
500
400
300
200
100
2009-2010
Note: Non-coking imports are adjusted for calorific value. .
Source: CRISIL Research
40 insight November 2009
The planning commissioner said that,
while India has seen average economic
growth of 9% over the last four years,
growth in 2008 fell to 6.7% with fore-
casts for 2009 ranging from 6.3-7%. He
noted that “there was a power shortage
of 12-13% under the tenth plan [period
ending in March 2007]. What impact
had this in [restricting] growth? We es-
timate this at $100 billion.”
Despite the need for development in
the power sector, Chaturvedi added
that the allocated coal blocks could
not be developed without due consid-
eration for other factors, particularly
local factors. “We also cannot override
the environment—we need to imple-
ment policy that looks after all aspects
including diversity, forestry, elephant
trails. Riding roughshod over these is
not the way to develop growth.”
India may be undergoing a modern
industrial revolution, yet it is trying to
strike a balance between development
and traditional values. But offering
competition for Europe in South Af-
rica and ready to devour as much coal
as Indonesia can spare, the Indian tiger
is unlikely to turn into a pussy cat any
time soon. ■
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emissions
Carbon Trading —
Asia and the New
World Order
Frank Watson, Managing Editor, Platts Emissions, and Mayumi Watanabe, Editor,
Platts Metals
Until recently the carbon trading
business occupied a clearly defined geo-
graphical and political space, with ac-
tivity centered squarely on Europe and
European Union requirements. There
was outlying activity—in Asia, for in-
stance, developing countries undertook
United Nations Clean Development
Mechanism projects to supply carbon
credits for trading in Europe, and there
was a voluntary emissions trading pro-
gram in Japan. But the carbon trading
world was firmly Eurocentric.
Not for much longer, though. The
2008 United States presidential elec-
tion saw a marked shift in national cli-
mate change politics in favor of some
form of carbon trading, while elections
in Australia in 2008 and Japan in 2009
had the same outcome. And looming
over all these developments is the cer-
tain replacement of the existing order
in 2012, although replacement by what
will only be determined at the Decem-
ber 2009 Copenhagen convention and
subsequent meetings.
What does this realignment of the
global carbon market mean? While
much remains uncertain, there are
three clear implications. First, climate
change and related carbon issues occupy
an increasingly prominent place in the
list of political priorities in many coun-
tries. Second, the carbon market will
become much less focused on Europe.
42 insight November 2009
And third, the carbon trading business
seems certain to grow substantially.
The first point is well illustrated by
the Japanese elections in August 2009,
which saw the Democratic Party se-
cure a landslide victory. While climate
change issues may not have been a de-
ciding factor they were important, with
clear differences on the issue in the
manifestos and election pledges of the
contending parties.
In overall economic terms, the stance
of the new government is not greatly
different from that of the outgoing ad-
ministration “The leaders of the new
ruling party have come from the con-
servative party, so this is essentially
Japan having two conservative parties
with similar philosophies and making
a modest switch,” one former aide to an
industry minister told Platts.
But the carbon policy commitments
of the new government are far stron-
ger than before and will be mandatory,
unlike the voluntary emissions trading
system adopted by its predecessor. This
operated for five years and had very
limited impact.
Instead, Prime Minister Yukio Hatoya-
ma told the UN on September 26 that
Japan plans to cut greenhouse gas emis-
sions by 25% from the 1990 level by
2020. This will be based on a carbon
emissions cap-and-trade system and the
possible introduction of a carbon tax.
 emissions

Separately, the Tokyo metropolitan September that “the strongest interest

government plans to launch its own for carbon trading systems comes from
cap-and-trade scheme from April 2010. South Korea,” adding that it “is looking
It has mandated that businesses con- at a leadership position.”
suming more than 1,500 kiloliters per Seoul’s interest in presenting itself as
year of petroleum fuel or equivalent a leader in the climate change business
must cut their emissions by 2014. The is unsurprising, given that it sees the
reduction must be by 6-8% from the production and export of new and re-
base year that they choose to use. newable energy technologies as one of
Japan is not alone among Asian its core future economic activities. But
countries in giving much higher pri- it is another indication of the new seri-
ority to the issue of climate change ousness with which Asian governments
than before. Addressing the UN Gen- are looking at the issue.
eral Assembly in September, Chinese In the wider Asia-Pacific region,
President Hu Jintao acknowledged the Australia could become a pacesetter
importance of the issue and said his if it launches a cap-and-trade carbon
country would contribute to the resolu- scheme in 2011 as planned. The gov-
tion of the problem. While Hu did not ernment’s proposed Carbon Pollution
give specific emissions reduction levels Reduction Scheme calls for a 5-15% cut
or timelines, his public acceptance of in 2000 GHG emissions by 2020 ac-
the need for Chinese action represents companied by the start of carbon trad-
a significant advance on the govern- ing in mid-2011.
ment’s previous position. The initiative hit a stumbling block
The South Korean government has when the Senate voted against the leg-
been more precise, saying that it is islation in August 2009. But the gov-
planning a 30% cut in its 2005 GHG ernment plans to re-submit the bill in
emissions by 2020. In this context November and, in an indication of the
Patrick Birley, the chief executive of importance of the issue, could call new
the European Climate Exchange, told national elections if the measure is re-
a Platts climate change conference in jected again.

1. Expected average annual CERs by host country (mt CO2e).

Colombia - 2,987,992 (1%)

Indonesia - 3,692,592 (1%)

Nigeria - 4,154,978 (1%) S Africa - 2,926,582 (1%)

Argentina - 4,162,237 (1%)

Qatar - 2,499,649 (1%)
Malaysia - 4,419,496 (1%)
Chile - 4,682,271 (1%)

Mexico - 8,948,550 (3%)

S Korea - 14,861,483 (5%)

Other - 20,678,519 (6%)

China - 188,898,918 (60%)

Brazil - 20,810,244 (7%)

India - 36,344,465 (11%)

Note: All figures are UN Certified Emission Reductions in metric tons of CO2 equivalent greenhouse gases.
Total expected annual CERs based on registered projects as of October 14, 2009: 320,067,976.
Source: UNFCCC

November 2009 insight 43

emissions
The government has proposed that
around 1,000 major industrial produc-
ers including coal, gas, iron, steel, ce-
ment, paper and power companies
should be encompassed by a scheme
intended to cover 75% of the country’s
GHG emissions. These stood at 553 mil-
lion metric tons in 2008.
Most of the emission allowances
would be allocated through auctions
under the government proposals, al-
though the opposition Liberal-National
But changes are to be expected in what is, after
all, a young market ... Even without its expanded
reach, and uncertainties about what the
market will look like post-2012, the youthfulness
and immaturity of the market mean that it will
necessarily continue to evolve.
coalition and industrial lobby groups
have put forward alternative proposals
involving different market mechanisms
and less onerous cost burdens. Debate
on the issue has centered both on who
should pay for the cuts and on whether
it is wise to commit to specific emission
cuts and timelines before the December
2009 Copenhagen talks.
What all this indicates is that Aus-
tralia and other Asia-Pacific countries
could take longer to implement their
carbon trading plans than originally
envisaged—even if Copenhagen pro-
duces a clear and unequivocal blueprint
for the future of the market. But it also
indicates that, at least in the medium to
long term, the current Eurocentric car-
bon trading world is likely to become a
thing of the past.
In the process, carbon trading could
become a much bigger business than
at present. Japan, for instance, is one of
the ten biggest emitters of GHGs in the
world, and its commitment to start car-
bon trading will create significant new
demand for carbon offsets.
The potential can be seen from a
Deutsche Bank assessment of what
it would cost to make good its Kyoto
Protocol commitments on cutting
44 insight November 2009
emissions by 2012. The bank said
that Japan would have to obtain off-
sets equivalent to more than 100 mil-
lion metric tons of carbon at a cost,
based on a price of $17/mt, of around
$1.7 billion. Most of this requirement
for credits has already been sourced
through purchase agreements by the
Japanese government in the form of
UN Certified Emission Reductions
from CDM projects and surplus As-
signed Amount Units—the sovereign
level credits established for industrial-
ized countries under Kyoto.
And with the US waiting in the wings,
and countries such as China and India
positioning themselves to become part
of the process, the carbon market is set
to become not only much larger but
also more genuinely global.
The process may not, of course, be
entirely comfortable for existing par-
ticipants in the market—the new en-
trants are likely to want changes. For
instance, the process for defining,
structuring and administering CDM
projects may come under scrutiny.
This could have repercussions for in-
vestors in the power generating and
other sectors in Asia, where the sale of
CERs from CDM projects has become
an increasingly important source of
project revenues.
But changes are to be expected in
what is, after all, a young market—the
EU Emissions Trading Scheme was only
launched in 2005. Even without its ex-
panded reach, and uncertainties about
what the market will look like post-
2012, the youthfulness and immaturity
of the market mean that it will neces-
sarily continue to evolve.
And the emerging global carbon
market will offer opportunities as
well as threats to what appears likely
to be a much-increased band of par-
ticipants. Trading activity to date has
been concentrated in Europe, where
the demand for carbon credits is cen-
tered. As Asia and other regions be-
come sources of demand and not just
credits, this seems likely to change,
with implications across the wider
Asian industrial, investment and trad-
ing communities. ■
 Attend The Platts Global Energy Awards Celebration on December 3, 2009
Please join more than 500 industry leaders from around the world at the Cipriani
Wall Street in New York City for the annual awards ceremony, where we formally
recognize the winner in each category.
Register today at: www.etouches.com/gea2009


2009 Platts Global Energy Awards Finalists
CEO of the Year Downstream Operations of the Year Green Energy Initiative of the Year Power Company of the Year
Greg Boyce, Peabody Energy Jamshoro Joint Venture Limited (JJVL) Alpine Energy Group LLC Consolidated Edison, Inc.
Antonio Brufau, Repsol Mansfield Oil Company Elementa Group Inc. CPS Energy
Peter Duprey, ACCIONA Energy North America Petrobras S.A. FPL Group, Inc. Entergy Corporation
Chengyu Fu, CNOOC Limited S-OIL Corporation Iberdrola, S.A. FPL Group, Inc.
James Hackett, Anadarko Petroleum Corporation Sovcomflot (SCF) Group Indian Oil Corporation Ltd. Public Service Enterprise Group (PSEG)
Lewis Hay, FPL Group, Inc. Naval Facilities Engineering Command Reliance Infrastructure Ltd.
Ralph Izzo, Public Service Enterprise Group PG&E Corporation
Energy Efficiency Program of the Year
(PSEG) Public Service Enterprise Group (PSEG) Rising Star Award
Ameren Illinois Utilities Recurrent Energy (North Face)
John C.S. Lau, Husky Energy, Inc. CoaLogix
Exel Logistics Recurrent Energy (San Francisco) EcoTek Lighting
Milton B. Lee, CPS Energy
Wayne Leonard, Entergy Corporation ComEd, An Exelon Company SolarCity Enzen Global Solutions Private Limited
Aubrey McClendon, Chesapeake Energy IKEA North America Zorlu Enerji Jamshoro Joint Venture Limited (JJVL)
Corporation Johnson & Johnson LanzaTech
Vincent de Rivaz, EDF Energy Michaels Stores, Inc. Industry Leadership Award Stream Energy
MidAmerican Energy Holdings Company Arch Coal, Inc.
Commercial Technology of the Year Orion Energy Systems Inc. Black & Veatch Corporation Sustainable Technology Innovation of
Alter NRG Pacific Gas and Electric Company California ISO the Year
Badger Licensing L.L.C. Reliance Industries Ltd. Carbon Capture and Storage Association Abengoa Solar
CNOOC Limited Staples Corporation Chesapeake Energy Corporation eSolar, Inc.
EnerNOC, Inc. Duke Energy Republic Services, Inc./HDR, Inc.
Stream Energy
InStep Software Energy Curtailment Specialists, Inc (ECS) Ice Energy
Lennox Industries Inc. Entergy Corporation InEnTec LLC
Energy Producer of the Year MidAmerican Energy Holdings Company
Process Dynamics Inc. Public Service Enterprise Group (PSEG)
Anadarko Petroleum Corporation Petrobras S.A. RSI Silicon
Repsol Chesapeake Energy Corporation
Shell Global Solutions PJM Interconnection Shell Global Solutions
CNOOC Limited Southern California Edison Sopogy, Inc.
Space-Time Insight
Coal India Limited Tessera Solar/Stirling Energy Systems
Peabody Energy Infrastructure Project of the Year Total
Community Development Program of the Year
Petrobras S.A. ATP Oil & Gas Corporation TURBINA IPD Ltd.
AES Dominicana
BP Australia Wade Adams Group
Chesapeake Energy Corporation
Engineering Project of the Year Bronzeoak Ltd.
CPS Energy
Entergy Corporation (Automatic Load Transfer) Entergy Corporation
El Paso Corporation
Entergy Corporation (University of Arkansas) San Diego Gas and Electric Company (SDG&E)
Entergy Corporation (Low Income Assistance)
Tetra Tech, Inc.
Entergy Corporation (University Funding) Mirant Corporation
Northeast Utilities MyCelx Technologies/Anadarko Petroleum
PTT Public Company Limited Corporation
Lifetime Achievement Award Principal Sponsor
Jean-Pierre Benqué, EDF International North America
Qalhat LNG Shell Exploration & Production Christopher Bloch, Boyle Energy Services and
Reliance Industries Ltd. YANSAB (Yanbu National Petrochemical Co) Technology
Reliance Infrastructure Ltd. Tom Casten, Recycled Energy Development (RED)
Valero Energy Corporation ENR Energy Construction Project of the Year Roger Duncan, Austin Energy
Advatech LLC Sheila Hollis, Duane Morris LLP
Deal of the Year Black & Veatch Bill Klesse, Valero Energy Corporation Co-Sponsor
Arch Coal, Inc. City Water, Light & Power (CWLP), Hardev Singh Kohli, Reliance Industries Ltd.
Belwind NV Lee Raymond, Exxon Mobil Corporation, retired
FPL Group, Inc.
Chesapeake Energy Corporation Larry Weyers, Integrys Energy Group
Navy CFAY
Enel SpA
Pepco Energy Services, Inc.
Gas Natural Marketing Campaign of the Year
Mansfield Oil Company SGT LLC
Alliant Energy
Shell Exploration & Production
MOL Nyrt.
SNC-Lavalin Constructors Inc.
Indian Oil Corporation Ltd. Celebration Sponsor
NRG Energy, Inc. Peabody Energy
Peabody Energy Tetra Tech Inc. PTT Public Company Limited
T-Power NV URS Washington Division (Palo Seco) Southern California Edison
Valero Energy Corporation URS Washington Division (Prairie Creek) Toronto Hydro Corporation

www.GlobalEnergyAwards.com
energy policy
A Sustainable Energy
Future for Asia
Lawrence Wong, Chief Executive, Energy Market Authority of Singapore
The global crisis is altering the shape
of the world’s economy and shifting
the global economic center of grav-
ity to the East. While most of the de-
veloped West struggled to keep their
economies from shrinking in the past
year, China and India were among
the few economies in the world that
continued to expand. Overall, the pic-
ture of a dynamic and resilient Asia
remains intact and this will continue
to drive confidence and optimism over
the medium term.
However, Asia needs a new model to
sustain its growth. “Business as usual”
is no longer an option. Over the past
decades, Asian economies have been
able to achieve high growth rates by in-
creasing their inputs of labor and capi-
tal while tapping on cheap supplies of
fossil fuels. Although this has succeed-
ed in lifting a generation out of pover-
ty, it has also put tremendous strain on
resources and created acute challenges
for the environment. Beyond resource
constraints, Asia needs to deal with
the challenges of climate change. The
emerging economies of Asia are among
the world’s largest emitters of green-
house gases. Collectively, they play a
critical role in shaping a viable global
solution on climate change.
Asian countries are understandably
reluctant to constrain their growth
and energy usage, when the developed
countries are responsible for the bulk
of current and historical greenhouse
gas emissions. However, attitudes are
shifting and climate change is be-
46 insight November 2009
coming a major priority on the policy
agenda. Across the region, countries
are grappling with new growth strat-
egies to address the challenges of cli-
mate change and energy for a more
sustainable future.
While the challenges ahead are com-
mon to all, the solutions differ. How do
we find energy options that are clean,
economically competitive, convenient
and reliable? The answer is complex.
Countries in Asia vary in size, popula-
tion and stage of development. Some
are endowed with abundant clean and
renewable energy sources while oth-
ers have no alternatives to fossil fuels.
There is no silver bullet and trade-offs
are inevitable. Countries have to strike
the right balance for themselves and
decide how far to go.
Renewable energy sources like solar
and wind power are part of the solu-
tion in a carbon-constrained world.
But realistically, they are unlikely to
have sufficient scale to replace fossil
fuels for some time to come. Other
low-carbon ways to power our future
are needed, but they are neither cost-
free nor problem-free. Risks and trade-
offs have to be managed. Carbon cap-
ture and sequestration technologies
are still experimental and far too ex-
pensive to be deployed on a commer-
cial basis. Biofuels, if produced in an
unsustainable way, can lead to defor-
estation, environmental degradation
and the destruction of carbon sinks.
Nuclear energy comes with the risks of
safety hazards, and proliferation of fis-

sile material or nuclear technology.
Nevertheless, with increased invest-
ments in energy R&D worldwide, it
is clear that technology will progress
steadily, and new alternatives and solu-
tions will emerge. Asian countries are
doing their part in this global research
effort. For example, China is hosting
the world’s largest solar research facil-
ity, and Japan is pioneering fuel cell
co-generation systems for residential
use. All over the region, companies
and governments are fi nding ways to
integrate new technologies into every-
day life, and learning how best these
can be harnessed to help meet their
energy needs.
As a small city-state with no natural
resources, Singapore has more than its
fair share of these energy challenges.
Nevertheless, we have taken a long-
term and holistic approach to strike a
balance between our objectives of eco-
nomic competitiveness, energy security
and environment sustainability.
Our starting point is to promote
competitive markets. We have restruc-
tured and liberalized our electric-
ity and gas markets. Energy is priced
properly and not subsidized. This
ensures the right incentives to avoid
over-consumption and to economize
on the use of energy.
At the same time, we have pursued
pragmatic and cost-effective ways to
improve energy efficiency and en-
courage conservation, for example, by
promoting greater use of public trans-
port and setting green standards for
buildings.
In the transmission and distribution
of electricity, we have invested in a
high quality grid to optimize usage, re-
duce transmission losses and enhance
reliability. The grid incorporates many
smart features, including an automated
condition monitoring system to detect
and remedy incipient faults. Singapore’s
grid performance, as measured by the
duration and frequency of interrup-
tions, is consistently ranked amongst
the best in the world.
In the power generation sector, mar-
ket liberalization has led to the rapid
planting of gas-fired combined cycle
energy policy
gas turbines in Singapore, replacing
the oil-fired steam plants. This has im-
proved the competitiveness of electric-
ity prices, and lowered our carbon in-
tensity. Today, more than 80 percent of
Singapore’s electricity is generated from
natural gas supplied by Malaysia and
Indonesia through pipelines. To diver-
sify our gas supply sources, Singapore
will be importing liquefied natural gas
by 2013.
Beyond LNG, there are practical
challenges to fuel diversification due
to our limited energy options. But we
recognize that technology is chang-
ing, and that energy solutions not vi-
able for Singapore today may become
viable in future. The government is
investing considerable sums to devel-
op clean technologies like solar and
biofuels. The Energy Market Author-
ity (EMA) is also actively engaged in a
wide range of test-bedding initiatives,
Current projects include a pilot for
electric vehicles on Singapore’s roads
and an intelligent micro-grid system
tapping on clean energy sources on an
offshore island.
Some of Singapore’s experiences may
be relevant to others in Asia. But no
single city or country will have all the
answers. Instead, we need closer col-
laboration to share experience and ex-
pertise, and develop pragmatic, work-
able solutions. This is why the EMA is
organizing the Singapore International
Energy Week from November 16th to
the 20th. The event will bring togeth-
er policy-makers, industry leaders and
subject matter experts to exchange
ideas on the broad energy issues of our
time. Through these interactions, we
hope to provide an Asian perspective
in shaping the energy debate.
The path towards sustainable de-
velopment requires all countries to
achieve the right balance between
economic growth, environmental pro-
tection and energy security. The stakes
are high and will become higher unless
we get it right early. As Asia continues
its transformation, I am confident that
we will be able to develop smarter en-
ergy solutions for a more sustainable
future. ■
November 2009 insight 47
top 250 global energy companies
Oil Price History
Redefined
Melanie Wold
Platts Top 250 Global Energy
Company Rankings™ reviewed.
The past two years have been some of
the most momentous in the history of
the oil markets. A frantic commodities
bubble redefined record oil prices and
sent crude oil soaring to over $147 per
barrel (/b) in July 2008. Oil products
skyrocketed as well, boosted by unprec-
edented demand from China in the run-
up to the Olympics. The oil price spikes
were followed by freefall, caused by the
global recession and a demand vacuum.
Crude oil futures dipped below $40/b
in December 2008 before rebound-
Platts Top 250 Global Energy
Company Rankings™ measures
financial performance by exam-
ining each company’s assets, reve-
nue, profits, and return on invest-
ed capital. All ranked companies
have assets greater than (US) $2
billion. The underlying data come
from the Capital IQ Compustat®
database, which is compiled and
maintained by Standard & Poor’s
(like Platts, a division of The
McGraw-Hill Companies). Energy
companies are grouped according
to their Global Industry Classifica-
tion Standard (GICS®) code.
48 insight November 2009
ing from mid-February back up to over
$70/b later in the year, despite continu-
ing recession in the OECD countries.
The boom and bust in prices threw
the industry under an unfamiliar me-
dia spotlight as the hue and cry from
wary consumers grew. While the struc-
ture of the energy industry has not
undergone an overnight sea change,
there has been a shift in tone. From in-
tegrated oil & gas companies (IOGs) to
electric utilities (EUs), there is a deep-
ening commitment to finding and us-
ing clean and sustainable alternative
sources of energy.
This has impacted many things from
intensifying the search for cleaner
sources of energy, such as natural gas,
to the way in which crude oil is refined.
IOGs are increasingly focused on find-
ing natural gas; technology for extract-
ing gas from shale and methane beds
has advanced substantially, which is
changing the global balance of energy.
This is leading to an increased desire to
produce LNG to enable its storage and
transportation.
Refining and marketing firms, as well
as IOGs, are increasing their produc-
tion of clean diesel. The pressure to uti-
lize clean alternative sources of energy
in electricity generation, particularly in
Europe, is impacting the physical infra-
 top 250 global energy companies

structure of electricity grids, which were its company on the New York Stock Ex-
not designed to deal with intermittent change (NYSE) in September 2008, and
and distributed energy sources. is planning to use the money raised on
But despite all this and the roller doubling its crude oil production. Bra-
coaster ride that oil prices have taken, zil’s Petrobras made a leap to 6th place
IOGs have retained their global domi- (from 12th in 2008), owing to addi-
nance. Thanks in part to last year’s tions to its reserves resulting from its
$100 plus crude oil, IOGs carved out the giant pre-salt layer oil finds.
top 13 spots in the 2009 Platts Top 250 Asian oil and gas companies took
Energy Company Rankings™, and took eight of the top 50 places, with Pet-
30 of the top 50 places. Platts rankings roChina topping the Asian chart and
are based on a combination of assets, reaching number nine in the overall
revenues, profits and return on capital top 250. CNOOC grabbed the number
invested for listed companies with over two spot in Asia, jumping up five plac-
$2 billion in assets. es. Otherwise, the top 50 rankings for
Exxon Mobil Corp retained the num- all energy companies were dominated
ber one spot for the fifth year running. by firms from Europe and the Middle
US, UK, EMEA and Russian IOGs took East, with 25 places overall. The Ameri-
two each of the ten top spots with cas were second with 17, eight of which
China and Brazil sharing the limelight were from the United States.
with one each. Latin America is making Exploration and production (E&P)
a better showing in the top 50 this year; companies also benefited from outright
the newly-listed Ecopetrol of Colombia, oil price spikes and good demand earlier
which wasn’t ranked last year, popped in 2008. Canada’s Encana climbed 19
in at 30th on 2009’s list. places to number 16 in the top 250 list.
Colombia’s mostly state-owned oil China’s CNOOC leapt 13 places to 21st
company listed about 10% interest in in the overall table. E&P companies were

1. Fastest growing Asia companies.

3-year Platts
Rank Company Country Industry CGR Rank
1 China Resources Power Holdings Hong Kong IPP 65.300 243
2 Reliance Infrastructure Ltd India EU 45.796 239
3 PT Bumi Resources Tbk Indonesia C&CF 30.127 146
4 Woodside Petroleum Ltd Australia E&P 29.679 85
5 PTT Plc Thailand IOG 29.108 46
6 Korea Gas Corp Korea GU 27.940 158
7 Formosa Petrochemical Taiwan R&M 27.822 113
8 Reliance Industries Ltd India R&M 27.226 25
9 Yanzhou Coal Mining Co Ltd China C&CF 27.159 124
10 China Shenhua Energy Co Ltd China C&CF 27.048 40
11 Datang Power China IPP 26.973 217
12 PTT Exploration & Production Thailand E&P 26.005 102
13 Petrochina Co Ltd China IOG 24.712 9
14 S-Oil Corp Korea R&M 22.965 120
15 PowerGrid Corp Of India India EU 22.511 244
16 GS Holdings Corp Korea R&M 21.863 164
17 CNOOC Ltd Hong Kong E&P 21.326 21
18 China Petroleum & Chemical Corp China IOG 21.132 23
19 Hong Kong & China Gas Co Ltd Hong Kong GU 20.103 181
20 Bharat Petroleum Co Ltd India R&M 19.970 97
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
Source: S&P Capital IQ Compustat/Platts

November 2009 insight 49

top 250 global energy companies
Platts Return on Industry
Rank Assets Revenues Profits invested capital 3-year (GICS
2009 Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code)
1 Exxon Mobil Corp Texas Americas 228,052 6 425,071 2 45,220 1 36.307 2 9.002 IOG
2 Chevron Corp California Americas 161,165 12 264,958 4 23,931 4 25.677 9 12.736 IOG
3 Royal Dutch Shell plc United Kingdom EMEA 282,401 2 458,361 1 26,277 3 18.422 34 14.327 IOG
4 BP plc United Kingdom EMEA 228,238 5 361,143 3 21,157 5 19.307 29 14.626 IOG
5 Total SA France EMEA 167,378 10 221,920 6 14,658 8 16.118 42 9.351 IOG
6 Petrobras Brazil Americas 148,015 13 107,106 14 16,424 7 17.265 39 16.342 IOG
7 Rosneft Oil Company Russian Federation EMEA 77,513 21 67,871 22 11,120 10 22.345 20 42.254 IOG
8 Gazprom Oao Russian Federation EMEA 232,618 4 124,661 10 26,319 2 12.726 64 36.502 IOG
9 Petrochina Co Ltd China Asia/Pacific Rim 174,853 9 156,523 8 16,721 6 13.004 62 24.712 IOG
10 ENI SpA Italy EMEA 164,945 11 149,692 9 12,215 9 14.134 56 13.622 IOG
11 StatoilHydro Norway EMEA 91,892 19 105,244 15 6,984 13 15.985 44 18.628 IOG
12 LUKOIL Oil Company Russian Federation EMEA 71,461 24 107,680 13 9,144 11 15.879 45 27.103 IOG
13 TNK-BP Holdings Russian Federation EMEA 31,179 65 45,128 28 6,384 17 30.166 5 21.936 IOG
14 RWE AG Germany EMEA 132,179 16 65,874 23 4,325 26 12.863 63 5.510 DU
15 Occidental Petroleum Corp California Americas 41,537 47 24,217 59 6,839 14 23.263 17 16.775 IOG
16 Encana Corp Canada Americas 52,740 33 32,012 45 6,329 18 15.380 50 30.314 E&P
17 BG Group plc United Kingdom EMEA 40,296 51 20,594 68 5,125 20 21.156 23 30.826 IOG
18 EDF Energy France EMEA 283,356 1 88,971 17 4,706 22 6.765 124 7.983 EU
19 Enel SpA Italy EMEA 188,454 8 82,463 19 6,994 12 6.533 125 22.674 EU
20 Marathon Oil Corp Texas Americas 42,686 43 72,128 21 3,528 32 12.381 68 7.171 IOG
21 CNOOC Ltd Hong Kong Asia/Pacific Rim 30,261 66 18,090 80 6,484 16 25.488 10 21.326 E&P
22 Repsol YPF SA Spain EMEA 69,929 27 82,539 18 3,752 31 8.474 100 12.050 IOG
23 China Petroleum & Chemical Corp China Asia/Pacific Rim 112,426 18 207,546 7 4,350 24 6.248 134 21.132 IOG
24 Gazprom Neft Russian Federation EMEA 20,205 111 32,410 43 4,658 23 29.654 6 31.257 IOG
25 Reliance Industries Ltd India Asia/Pacific Rim 37,188 56 29,094 48 4,141 28 14.877 52 27.226 R&M
26 Oil & Natural Gas Corp Ltd India Asia/Pacific Rim 26,645 82 20,531 69 4,216 27 24.810 11 17.443 E&P
27 GDF Suez France EMEA 236,556 3 94,016 16 6,723 15 5.585 161 17.859 DU
28 Hess Corp New York Americas 28,589 77 41,165 32 2,360 44 14.641 53 21.862 IOG
29 Surgutneftegas Oao Russian Federation EMEA 36,223 58 19,367 71 5,098 21 13.584 57 8.438 IOG
30 Ecopetrol SA Colombia Americas 22,752 100 15,791 90 5,418 19 33.353 3 29.764 IOG
31 Imperial Oil Ltd Canada Americas 15,536 131 26,035 54 3,374 33 36.626 1 4.113 IOG
32 OMV AG Austria EMEA 30,242 67 35,355 36 1,902 50 11.560 73 17.915 IOG
33 Indian Oil Corp Ltd India Asia/Pacific Rim 26,817 81 43,998 29 1,679 57 13.232 59 16.361 R&M
34 Exelon Corp Illinois Americas 47,817 37 18,859 75 2,717 40 11.452 77 7.087 EU
35 Husky Energy Inc Canada Americas 24,187 94 21,488 65 3,266 34 17.781 37 34.091 IOG
36 Iberdrola SA Spain EMEA 121,437 17 34,875 38 3,959 29 5.865 147 28.996 EU
37 Petro-Canada Canada Americas 27,703 79 23,997 60 2,726 39 13.391 58 16.192 IOG
38 Endesa SA Spain EMEA 82,828 20 30,075 46 3,163 36 5.974 143 7.464 EU
39 Anadarko Petroleum Corp Texas Americas 48,923 35 14,640 96 3,198 35 10.649 80 27.280 E&P
40 China Shenhua Energy Co Ltd China Asia/Pacific Rim 40,765 50 15,655 92 3,885 30 11.551 75 27.048 C&CF
41 Vattenfall Sweden EMEA 58,800 29 22,414 63 2,329 45 7.816 111 8.407 EU
42 Canadian Natural Resources Canada Americas 38,896 52 12,190 116 4,337 25 13.082 60 17.815 E&P
43 Sasol Ltd South Africa EMEA 17,418 124 14,578 98 2,515 42 23.677 15 24.444 IOG
44 Murphy Oil Corp Arkansas Americas 11,149 160 27,441 52 1,740 55 23.819 14 32.938 IOG
45 E.On AG Germany EMEA 222,178 7 120,806 11 1,929 48 2.197 217 18.953 EU
46 PTT Plc Thailand Asia/Pacific Rim 25,750 86 57,825 25 1,494 62 7.847 110 29.108 IOG
47 EnBW Germany EMEA 46,581 38 22,643 62 1,207 81 8.296 103 14.834 EU
48 Suncor Energy Inc Canada Americas 29,665 69 25,655 55 1,859 51 7.911 109 43.262 IOG
49 CEZ AS Czech Republic EMEA 24,848 90 9,604 132 2,516 41 18.461 33 12.383 EU
50 Dominion Resources Inc Virginia Americas 42,053 45 16,290 86 1,853 52 7.260 119 -3.346 DU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

50 insight November 2009

 top 250 global energy companies
Platts Return on Industry
Rank Assets Revenues Profits invested capital 3-year (GICS
2009 Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code)
51 FPL Group Inc Florida Americas 44,821 40 16,410 85 1,639 58 6.424 130 11.475 EU
52 Eletrobras Brazil Americas 69,940 26 14,576 99 3,055 37 5.728 152 12.109 EU
53 Talisman Energy Inc Canada Americas 22,138 104 8,404 138 2,902 38 17.399 38 7.016 E&P
54 Gas Natural Sdg SA Spain EMEA 26,548 83 18,747 76 1,463 65 9.248 96 16.677 GU
55 EDP Portugal EMEA 50,519 34 18,923 73 1,508 60 5.610 158 13.923 EU
56 TonenGeneral Sekiyu Corp Japan Asia/Pacific Rim 9,443 173 33,011 42 800 106 28.521 7 4.639 R&M
57 Southern Co Georgia Americas 48,347 36 17,127 82 1,807 54 5.588 160 8.111 EU
58 National Grid United Kingdom EMEA 71,685 23 25,605 56 1,506 61 3.339 196 19.338 DU
59 Sunoco Inc Pennsylvania Americas 11,150 159 51,558 26 776 107 15.567 49 18.269 R&M
60 MidAmerican Energy Holdings Iowa Americas 41,441 48 12,668 113 1,850 53 6.442 129 21.199 DU
61 EOG Resources Inc Texas Americas 15,951 127 6,984 155 2,437 43 22.405 19 24.740 E&P
62 Fortum OYJ Finland EMEA 28,688 74 7,801 144 2,134 46 10.328 84 13.281 EU
63 FirstEnergy Corp Ohio Americas 33,521 62 13,580 108 1,342 69 7.720 115 4.241 EU
64 Transneft OJSC Russian Federation EMEA 24,095 96 7,862 142 2,130 47 11.559 74 13.839 S&T
65 Union Fenosa SA Spain EMEA 27,374 80 9,951 129 1,580 59 9.524 93 5.635 EU
66 American Electric Power Co Inc Ohio Americas 45,155 39 14,440 100 1,371 66 5.159 165 6.038 EU
67 PG&E Corp California Americas 40,860 49 14,628 97 1,184 83 5.872 146 7.720 DU
68 Edison International California Americas 44,615 41 14,112 101 1,266 75 5.610 159 5.990 EU
69 XTO Energy Inc Texas Americas 38,254 55 7,692 146 1,912 49 6.524 126 29.829 E&P
70 Williams Companies Inc Oklahoma Americas 26,006 85 12,352 114 1,334 71 7.970 108 -0.617 S&T
71 Entergy Corp Louisiana Americas 36,617 57 13,094 112 1,241 78 6.166 137 9.016 EU
72 AES Corp Virginia Americas 34,806 60 16,102 88 1,216 79 5.066 167 13.249 IPP
73 NTPC Ltd India Asia/Pacific Rim 19,885 115 9,386 133 1,717 56 9.741 91 17.958 IPP
74 SK Energy Co Ltd Korea Asia/Pacific Rim 19,884 116 42,405 30 716 116 6.372 133 n/c R&M
75 Inpex Corp Japan Asia/Pacific Rim 18,518 119 10,856 124 1,463 64 9.681 92 15.183 E&P
76 Erg SpA Italy EMEA 7,845 193 15,915 89 894 101 22.452 18 8.676 R&M
77 Duke Energy Corp North Carolina Americas 53,077 32 13,207 111 1,279 74 3.718 190 -7.609 EU
78 Public Service Enterprise Group Inc New Jersey Americas 29,049 73 13,807 106 987 94 6.200 136 3.564 DU
79 Kinder Morgan Energy Partners LP Texas Americas 17,886 122 11,740 118 1,304 73 9.058 97 6.253 S&T
80 Nexen Inc Canada Americas 20,205 112 7,027 153 1,492 63 10.431 83 20.472 E&P
81 Sempra Energy California Americas 26,400 84 10,758 126 1,123 86 7.403 116 -2.861 DU
82 Enbridge Inc Canada Americas 22,527 102 14,033 104 1,155 84 6.495 127 24.037 S&T
83 YPF Argentina Americas 10,437 164 10,465 127 1,092 88 16.839 40 15.050 IOG
84 Suez Environnement SA France EMEA 27,886 78 17,113 83 738 113 5.752 151 3.684 DU
85 Woodside Petroleum Ltd Australia Asia/Pacific Rim 11,945 154 4,541 179 1,354 67 18.060 35 29.679 E&P
86 CLP Holdings Hong Kong Asia/Pacific Rim 17,136 125 6,988 154 1,341 70 9.753 90 12.061 EU
87 Consolidated Edison Inc New York Americas 33,498 63 13,583 107 933 100 4.812 170 5.130 DU
88 Mol Hungarian Oil Hungary EMEA 14,553 138 18,605 78 744 111 7.215 120 12.920 IOG
89 Veolia Environnement France EMEA 69,501 28 50,113 27 306 176 0.831 227 12.772 DU
90 TransCanada Corp Canada Americas 35,945 59 7,498 147 1,253 76 4.395 178 12.066 S&T
91 PPL Corp Pennsylvania Americas 21,405 106 8,044 141 940 98 7.348 117 8.956 EU
92 Noble Energy Inc Texas Americas 12,384 152 3,727 196 1,350 68 15.789 47 21.152 E&P
93 Enersis SA Chile Americas 25,701 87 11,602 121 996 93 5.159 166 27.404 EU
94 Peabody Energy Corp Missouri Americas 9,822 172 6,593 160 985 95 16.293 41 12.389 C&CF
95 NRG Energy Inc New Jersey Americas 24,808 91 6,885 156 1,016 92 6.378 132 36.485 IPP
96 Acciona SA Spain EMEA 54,409 31 17,531 81 521 138 1.520 222 37.682 EU
97 Bharat Petroleum Co Ltd India Asia/Pacific Rim 10,117 168 23,599 61 375 158 10.105 86 19.970 R&M
98 China Coal Energy Co China Asia/Pacific Rim 12,912 147 7,451 148 1,043 90 9.787 89 19.262 C&CF
99 Spectra Energy Corp Texas Americas 21,924 105 5,074 173 1,129 85 7.773 113 -18.733 S&T
100 Alpiq Holding AG Switzerland EMEA 9,904 171 11,606 120 647 120 12.028 71 14.703 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

November 2009 insight 51

top 250 global energy companies
Platts Return on Industry
Rank Assets Revenues Profits invested capital 3-year (GICS
2009 Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code)
101 Mirant Corp Georgia Americas 10,688 162 3,188 211 1,215 80 19.008 30 -8.664 IPP
102 PTT Exploration & Production Thailand Asia/Pacific Rim 6,931 203 3,952 190 1,204 82 27.309 8 26.005 E&P
103 International Power plc United Kingdom EMEA 24,325 93 6,262 163 1,093 87 5.976 142 25.501 IPP
104 VEO Austria EMEA 11,734 155 5,183 171 950 96 12.588 65 14.317 EU
105 CEMIG Brazil Americas 12,332 153 5,422 167 940 99 11.965 72 9.761 EU
106 Energy Transfer Partners LP Texas Americas 10,627 163 9,294 135 866 102 9.251 95 14.639 S&T
107 Plains All American Pipeline LP Texas Americas 10,032 170 30,061 47 437 148 6.416 131 -1.208 S&T
108 Progress Energy Inc North Carolina Americas 29,873 68 9,167 136 773 109 3.929 188 -3.205 EU
109 Apache Corp Texas Americas 29,186 72 12,328 115 712 117 3.313 197 18.241 E&P
110 Canadian Oil Sands Trust Canada Americas 6,323 216 3,627 200 1,325 72 24.182 13 28.455 E&P
111 Chesapeake Energy Corp Oklahoma Americas 38,444 54 11,629 119 723 115 2.044 218 35.588 E&P
112 Distrigas SA Belgium EMEA 6,311 217 8,217 140 550 132 22.319 21 15.997 GU
113 Formosa Petrochemical Taiwan Asia/Pacific Rim 13,210 145 26,886 53 467 142 4.676 172 27.822 R&M
114 Xcel Energy Inc Minnesota Americas 24,958 89 11,203 123 646 121 4.334 180 5.190 DU
115 Santos Ltd Australia Asia/Pacific Rim 7,843 194 2,094 229 1,251 77 23.589 16 3.893 E&P
116 Tokyo Electric Power Co Inc Japan Asia/Pacific Rim 142,015 15 59,391 24 -853 243 -0.935 236 3.858 EU
117 ConocoPhillips Texas Americas 142,865 14 225,424 5 -16,998 250 -19.095 250 11.549 IOG
118 Penn West Energy Trust Canada Americas 14,055 141 3,839 191 1,062 89 8.790 98 41.308 E&P
119 CEPSA Spain EMEA 13,653 144 34,831 39 380 157 4.346 179 11.061 IOG
120 S-Oil Corp Korea Asia/Pacific Rim 6,145 219 18,624 77 360 163 12.492 67 22.965 R&M
121 Kyushu Electric Power Co Inc Japan Asia/Pacific Rim 43,056 42 15,375 93 343 170 1.180 225 2.831 EU
122 Edison SpA Italy EMEA 21,353 107 15,317 94 484 141 3.374 194 18.501 IPP
123 Tenaga Nasional Bhd Malaysia Asia/Pacific Rim 20,020 114 7,376 150 743 112 5.467 162 10.709 EU
124 Yanzhou Coal Mining Co Ltd China Asia/Pacific Rim 4,703 238 3,817 192 947 97 24.380 12 27.159 C&CF
125 Kansai Electric Power Co Japan Asia/Pacific Rim 73,002 22 28,140 50 -89 234 -0.194 234 2.650 EU
126 Addax Petroleum Corp Canada Americas 5,935 220 4,000 187 835 103 18.565 32 57.587 E&P
127 Scottish & Southern Energy United Kingdom EMEA 28,646 75 41,666 31 184 218 1.536 221 35.830 EU
128 Ameren Corp Missouri Americas 22,657 101 7,839 143 615 125 4.405 177 4.957 DU
129 ONEOK Partners LP Oklahoma Americas 7,254 200 7,720 145 626 124 11.364 78 124.912 S&T
130 Endesa Chile Americas 12,748 149 4,347 183 772 110 7.989 107 30.425 IPP
131 CONSOL Energy Inc Pennsylvania Americas 7,370 198 4,521 180 442 146 20.650 25 9.806 C&CF
132 Tupras Turkey EMEA 5,588 225 21,092 66 299 179 10.646 81 27.068 R&M
133 DTE Energy Co Michigan Americas 24,590 92 9,329 134 526 137 3.817 189 1.122 DU
134 Tokyo Gas Co Ltd Japan Asia/Pacific Rim 18,477 120 16,747 84 421 150 3.249 201 9.441 GU
135 Chubu Electric Power Co Inc Japan Asia/Pacific Rim 57,292 30 25,319 58 -191 236 -0.521 235 5.287 EU
136 Nippon Oil Corp Japan Asia/Pacific Rim 41,577 46 74,539 20 -2,538 248 -13.907 248 6.495 R&M
137 CPFL Energia SA Brazil Americas 8,229 187 4,832 176 635 123 11.550 76 10.811 EU
138 Valero Energy Corp Texas Americas 34,417 61 118,298 12 -1,131 245 -5.168 245 13.288 R&M
139 Hongkong Electric Holdings Ltd Hong Kong Asia/Pacific Rim 8,829 181 1,644 237 1,033 91 14.259 55 3.198 EU
140 KEPCO Korea Asia/Pacific Rim 70,312 25 25,440 57 -2,382 247 -4.575 244 7.444 EU
141 Questar Corp Utah Americas 8,631 182 3,465 203 684 119 12.373 69 8.340 GU
142 Enterprise GP Holdings LP Texas Americas 25,371 88 35,470 35 164 222 0.743 230 42.503 S&T
143 Eletropaulo Brazil Americas 6,361 215 3,749 194 511 139 19.780 27 -3.277 EU
144 CenterPoint Energy Inc Texas Americas 19,676 118 11,322 122 447 145 3.659 191 5.210 DU
145 Centrica plc United Kingdom EMEA 29,577 70 34,981 37 -238 237 -1.907 239 16.649 DU
146 PT Bumi Resources Tbk Indonesia Asia/Pacific Rim 5,320 230 3,378 207 645 122 20.954 24 30.127 C&CF
147 Hindustan Petroleum Corp Ltd India Asia/Pacific Rim 9,161 180 21,659 64 289 187 5.728 153 17.811 R&M
148 Gail (India) Ltd India Asia/Pacific Rim 5,355 228 3,996 188 590 126 16.042 43 15.179 GU
149 ONEOK Inc Oklahoma Americas 13,126 146 16,157 87 312 174 4.284 182 8.424 GU
150 Tesoro Corp Texas Americas 7,433 197 28,031 51 278 192 5.759 150 19.387 R&M
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

52 insight November 2009

 top 250 global energy companies
Platts Return on Industry
Rank Assets Revenues Profits invested capital 3-year (GICS
2009 Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code)
151 Novatek Oao Russian Federation EMEA 4,540 239 2,769 218 811 105 19.643 28 26.944 E&P
152 Idemitsu Kosan Co Ltd Japan Asia/Pacific Rim 23,983 97 38,317 34 34 231 0.357 232 4.513 R&M
153 Tohoku Electric Power Co Inc Japan Asia/Pacific Rim 42,097 44 18,594 79 -321 240 -1.157 238 3.551 EU
154 Drax Group United Kingdom EMEA 3,397 250 2,873 214 546 133 31.908 4 23.586 IPP
155 NiSource Inc Indiana Americas 20,032 113 8,874 137 370 159 3.465 193 3.956 DU
156 A2A SpA Italy EMEA 15,770 129 8,254 139 437 147 3.991 187 27.045 DU
157 Snam Rete Gas SpA Italy EMEA 15,883 128 2,627 222 734 114 6.041 141 1.783 GU
158 Korea Gas Corp Korea Asia/Pacific Rim 17,563 123 18,874 74 264 195 2.274 215 27.940 GU
159 Osaka Gas Co Ltd Japan Asia/Pacific Rim 15,212 134 13,384 110 364 162 3.177 203 7.569 GU
160 Enerplus Resources Fund Canada Americas 5,682 223 1,712 233 773 108 15.727 48 19.840 E&P
161 Frontline Ltd Bermuda Americas 4,028 243 2,086 230 699 118 21.217 22 11.606 S&T
162 Linn Energy LLC Texas Americas 4,722 237 1,435 242 826 104 18.704 31 n/c E&P
163 Enbridge Energy Partners LP Texas Americas 8,301 185 10,060 128 403 151 5.695 155 15.809 S&T
164 GS Holdings Corp Korea Asia/Pacific Rim 18,424 121 32,342 44 90 229 0.890 226 21.863 R&M
165 Saudi Electricity Co Saudi Arabia EMEA 38,809 53 5,950 165 295 184 1.740 219 5.911 EU
166 Southwestern Energy Co Texas Americas 4,760 235 2,312 226 568 129 17.792 36 50.631 E&P
167 Abu Dhabi National Energy Co United Arab Emirates EMEA 23,519 98 4,509 181 497 140 2.798 209 84.974 DU
168 Tractebel Energia SA Brazil Americas 4,226 241 1,713 232 555 130 20.587 26 9.795 IPP
169 SNP Petrom Romania EMEA 8,424 184 6,030 164 365 161 6.791 122 16.223 IOG
170 Pepco Holdings Inc District of Columbia Americas 16,475 126 10,824 125 300 177 3.133 204 10.304 EU
171 Nippon Mining Hldgs Inc Japan Asia/Pacific Rim 19,754 117 41,006 33 -412 241 -4.089 242 10.337 R&M
172 OAO Tatneft Russian Federation EMEA 12,752 148 15,729 91 298 181 2.447 214 13.967 E&P
173 Iberdrola Renewables SA Spain EMEA 28,601 76 2,810 216 540 135 2.764 211 53.876 IPP
174 COPEL Brazil Americas 6,714 206 2,650 221 537 136 10.936 79 3.124 EU
175 Devon Energy Corp Oklahoma Americas 31,908 64 15,211 95 -3,079 249 -13.573 247 12.298 E&P
176 PKN ORLEN Poland EMEA 15,473 132 28,859 49 -239 239 -2.634 240 24.527 R&M
177 China Yangtze Power Co China Asia/Pacific Rim 8,454 183 1,287 245 574 127 8.134 105 6.654 IPP
178 Chugoku Electric Power Co Japan Asia/Pacific Rim 29,390 71 11,840 117 -238 238 -1.129 237 4.105 EU
179 Galp Energia SGPS SA Portugal EMEA 9,370 175 20,881 67 162 223 3.313 198 10.649 IOG
180 Cosmo Oil Co Ltd Japan Asia/Pacific Rim 15,086 135 34,582 40 -932 244 -13.508 246 8.680 R&M
181 Hong Kong & China Gas Co Ltd Hong Kong Asia/Pacific Rim 6,703 208 1,590 238 554 131 9.804 88 20.103 GU
182 Wisconsin Energy Corp Wisconsin Americas 12,618 151 4,431 182 359 164 4.819 169 5.111 DU
183 SCANA Corp South Carolina Americas 11,502 157 5,319 169 353 167 4.602 173 3.647 DU
184 EWE Germany EMEA 10,225 166 7,439 149 285 189 5.205 163 13.421 EU
185 Constellation Energy Group Inc Maryland Americas 22,284 103 19,818 70 -1,301 246 -15.481 249 4.975 IPP
186 Showa Shell Sekiyu KK Japan Asia/Pacific Rim 12,673 150 33,014 41 -164 235 -4.111 243 12.995 R&M
187 CMS Energy Corp Michigan Americas 14,901 136 6,821 157 300 178 3.195 202 2.749 DU
188 Allegheny Energy Inc Pennsylvania Americas 10,811 161 3,386 206 395 153 5.640 157 3.682 EU
189 Gasunie Netherlands EMEA 14,055 142 2,179 228 545 134 4.521 174 6.047 GU
190 Cheung Kong Infrastructure Bermuda Asia/Pacific Rim 5,807 221 315 250 569 128 10.570 82 2.855 EU
191 Integrys Energy Group Inc Illinois Americas 14,273 139 14,048 103 125 226 2.238 216 26.360 DU
192 EGL Switzerland EMEA 6,730 205 3,736 195 282 190 9.308 94 1.275 EU
193 Arc Energy Trust Canada Americas 3,435 249 1,210 246 464 143 15.876 46 18.199 E&P
194 Arch Coal Inc Missouri Americas 3,979 244 2,984 213 354 166 12.529 66 4.931 C&CF
195 Shikoku Electric Power Co Japan Asia/Pacific Rim 14,722 137 6,407 161 294 186 2.992 207 3.830 EU
196 Polish Oil And Gas Co Poland EMEA 9,338 176 6,688 158 314 173 4.169 184 13.639 IOG
197 MDU Resources Group Inc North Dakota Americas 6,588 211 5,003 174 294 185 6.767 123 13.132 DU
198 Encore Acquisition Co Texas Americas 3,633 247 1,135 247 431 149 15.369 51 35.408 E&P
199 Terna SpA Italy EMEA 9,285 177 1,784 231 454 144 5.931 144 7.981 EU
200 Cameco Corp Canada Americas 6,393 213 2,487 223 392 154 8.054 106 29.627 C&CF
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

November 2009 insight 53

top 250 global energy companies
Platts Return on Industry
Rank Assets Revenues Profits invested capital 3-year (GICS
2009 Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code)
201 Origin Energy Ltd Australia Asia/Pacific Rim 10,056 169 6,274 162 282 191 4.466 176 18.969 IOG
202 Ultrapar Participacoes SA Brazil Americas 4,898 232 14,074 102 194 216 5.819 148 81.937 S&T
203 Electric Power Development Co Japan Asia/Pacific Rim 21,005 109 7,111 152 196 215 1.206 224 4.264 IPP
204 Denbury Resources Inc Texas Americas 3,590 248 1,361 243 388 155 14.423 54 34.671 E&P
205 Red Electrica Corp SA Spain EMEA 8,224 188 1,566 241 396 152 6.895 121 9.566 EU
206 Northeast Utilities Massachusetts Americas 13,988 143 5,800 166 266 194 3.291 200 -7.788 EU
207 Calpine Corp California Americas 20,738 110 9,937 130 -13 233 -0.092 233 -0.582 IPP
208 AES Elpa SA Brazil Americas 6,874 204 3,690 197 231 205 8.323 102 -3.962 EU
209 Huaneng Power International China Asia/Pacific Rim 24,099 95 9,911 131 -541 242 -3.352 241 19.001 IPP
210 Neste Oil Oyj Finland EMEA 6,678 209 19,143 72 134 224 3.124 205 11.511 R&M
211 United Utilities Group plc United Kingdom EMEA 15,712 130 3,990 189 296 182 2.719 212 0.665 DU
212 Tullow Oil plc United Kingdom EMEA 4,727 236 1,134 248 366 160 12.371 70 15.817 E&P
213 Alliant Energy Corp Wisconsin Americas 8,202 189 3,682 198 299 180 5.812 149 3.930 DU
214 Acea SpA Italy EMEA 7,886 192 4,230 184 257 197 5.890 145 24.768 DU
215 Energen Corp Alabama Americas 3,775 246 1,569 240 322 171 13.007 61 11.612 GU
216 Canadian Utilities Canada Americas 7,172 201 2,417 224 388 156 6.077 138 3.371 DU
217 Datang Power China Asia/Pacific Rim 23,029 99 5,383 168 120 227 0.801 229 26.973 IPP
218 Eskom South Africa EMEA 21,280 108 4,986 175 166 221 1.386 223 1.123 EU
219 TEPPCO Partners LP Texas Americas 5,050 231 13,533 109 194 217 4.697 171 16.230 S&T
220 Enagas SA Spain EMEA 6,675 210 1,670 236 358 165 7.283 118 -7.249 GU
221 UGI Corp Pennsylvania Americas 5,685 222 6,648 159 216 211 6.046 140 10.791 GU
222 Pengrowth Energy Trust Canada Americas 4,849 233 1,683 235 344 169 8.688 99 18.364 E&P
223 Overseas Shipholding Group Inc New York Americas 3,890 245 1,705 234 318 172 9.863 87 19.446 S&T
224 MVV Energie AG Germany EMEA 5,358 227 3,668 199 235 203 7.788 112 9.431 DU
225 Range Resources Corp Texas Americas 5,563 226 1,301 244 346 168 8.148 104 34.191 E&P
226 National Fuel Gas Co New York Americas 4,130 242 2,400 225 269 193 10.325 85 7.661 GU
227 NuStar Energy LP Texas Americas 4,460 240 4,829 177 254 199 6.227 135 94.176 R&M
228 NSTAR Massachusetts Americas 8,269 186 3,345 209 240 201 5.690 156 1.040 DU
229 Southern Union Co Texas Americas 7,998 190 3,070 212 295 183 4.967 168 14.986 S&T
230 AGL Energy Australia Asia/Pacific Rim 7,564 196 4,117 185 240 200 4.467 175 3.372 DU
231 Nicor Inc Illinois Americas 4,784 234 3,777 193 120 228 8.405 101 3.996 GU
232 OGE Energy Corp Oklahoma Americas 6,519 212 4,071 186 231 206 5.701 154 -11.876 DU
233 AGL Resources Inc Georgia Americas 6,710 207 2,800 217 217 210 6.460 128 0.996 GU
234 Hokuriku Electric Power Co Japan Asia/Pacific Rim 15,228 133 5,292 170 75 230 0.643 231 2.948 EU
235 Hellenic Petroleum SA Greece EMEA 7,280 199 14,023 105 33 232 0.809 228 15.047 R&M
236 Petrobras Energia SA Argentina Americas 6,178 218 4,554 178 233 204 5.163 164 12.510 IOG
237 Atmos Energy Corp Texas Americas 6,387 214 7,221 151 180 219 4.322 181 13.237 GU
238 EVN Austria EMEA 9,389 174 3,336 210 259 196 4.059 186 14.411 EU
239 Reliance Infrastructure Ltd India Asia/Pacific Rim 5,625 224 2,652 220 287 188 6.065 139 45.796 EU
240 Pinnacle West Capital Corp Arizona Americas 11,620 156 3,367 208 214 212 3.297 199 4.062 EU
241 EQT Corp Pennsylvania Americas 5,330 229 1,576 239 256 198 7.747 114 7.935 GU
242 Dynegy Inc Texas Americas 14,213 140 3,549 201 171 220 1.620 220 15.339 IPP
243 China Resources Power Holdings Hong Kong Asia/Pacific Rim 10,276 165 3,445 204 221 208 2.943 208 65.300 IPP
244 PowerGrid Corp Of India India Asia/Pacific Rim 9,189 178 981 249 307 175 4.278 183 22.511 EU
245 NV Energy Inc Nevada Americas 11,346 158 3,528 202 209 213 2.487 213 5.202 EU
246 Fortis Inc Canada Americas 10,194 167 3,395 205 225 207 2.783 210 39.751 EU
247 Hera SpA Italy EMEA 7,789 195 5,144 172 131 225 3.007 206 29.012 DU
248 Atco Ltd Canada Americas 7,910 191 2,841 215 236 202 3.635 192 4.525 DU
249 Pioneer Natural Resources Co Texas Americas 9,163 179 2,277 227 221 209 3.343 195 0.919 E&P
250 Transalta Corp Canada Americas 7,127 202 2,705 219 204 214 4.126 185 3.092 IPP
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

54 insight November 2009

 top 250 global energy companies

prominent in the top 50 fastest grow- 2008 to 117th in Platts 2009 rankings.
ing list and made up 30% of the fastest Valero suffered a similar fate, falling
growing companies from the Americas, from 14th to 138th and is closing down
led by Addax Petroleum, which has re- refineries in 2009. Sunoco appeared to
cently been taken over by China’s Sino- have a delayed reaction, largely thanks
pec, and Southwestern Energy. to diesel demand from Asia, coming in
Oil price moves also meant that 16 at fourth place in the R&M table and
oil storage and transportation compa- 59th overall. This year, however, Suno-
nies made the top 250 in 2009 vs 13 co is also in the process of shutting
in 2008, having reaped the benefits of down refining capacity.
a contango market which lasted a good Two Indian R&Ms led the table with
part of 2008. Owners of oil storage and Reliance Industries in first place (25th
natural gas pipelines were the main ben- overall). Reliance bested its rivals in
eficiaries. Waterborne oil shipping sank Asia, owing to its sophisticated refinery
along with demand in 2008, but perked system, which optimizes cheaper heavy
up again in 2009 as contango led oil crude oil. Indian Oil Corp was second
companies to utilize floating storage. (33rd overall) and Japan was third with
TonenGeneral Sekiyu (56th overall).
Refining Takes it on the Chin
The picture for the oil & gas indus- Major Majors
try was not all rosy, however. Refining The major integrated oil and gas
and marketing firms, having started companies did not have a smooth ride
2008 with good demand and healthy on their way to dominating the top
margins, suffered greatly from the eco- 10. All were hit by falling oil prices in
nomic downturn as demand dropped last-quarter 2008 and sinking demand
and margins shrank. The worldwide throughout first-half 2009. And, in the
recession heralded a compression in re- US, they narrowly averted a massive
fining margins with people driving less strike of United Steelworkers early in
and upgrading to more fuel-efficient 2009, who were negotiating a new con-
cars. Crude oil prices remained relative- tract with Royal Dutch Shell. The strike
ly high as the appetite for commodities could have paralyzed over 50% of the
exposure continued, while products in- US’s refinery capacity.
cluding gasoline and heating oil fell. The US grabbed two spots in the top
ConocoPhillips, which is heavily de- 10, with ExxonMobil in the number one
pendent upon refining, saw its revenues position and Chevron in second place.
fall by 27% for the financial year 2008. ExxonMobil made the top of the list for
ConocoPhillips fell from number 16 in the fifth year in a row, with revenues of

2. Fastest growing Americas companies.

3-year Platts
Rank Company State or country Industry CGR Rank
1 ONEOK Partners LP Oklahoma S&T 124.912 129
2 NuStar Energy LP Texas R&M 94.176 227
3 Ultrapar Participacoes SA Brazil S&T 81.937 202
4 Addax Petroleum Corp Canada E&P 57.587 126
5 Southwestern Energy Co Texas E&P 50.631 166
6 Suncor Energy Inc Canada IOG 43.262 48
7 Enterprise GP Holdings LP Texas S&T 42.503 142
8 Penn West Energy Trust Canada E&P 41.308 118
9 Fortis Inc Canada EU 39.751 246
10 NRG Energy Inc New Jersey IPP 36.485 95
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
Source: S&P Capital IQ Compustat/Platts

November 2009 insight 55

top 250 global energy companies
Platts Return on Industry
Top Rank Assets Revenues Profits invested capital (GICS
Asia 2009 Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code)
1 9 Petrochina Co Ltd China 174,853 9 156,523 8 16,721 6 13.004 62 IOG
2 21 CNOOC Ltd Hong Kong 30,261 66 18,090 80 6,484 16 25.488 10 E&P
3 23 China Petroleum & Chemical Corp China 112,426 18 207,546 7 4,350 24 6.248 134 IOG
4 25 Reliance Industries Ltd India 37,188 56 29,094 48 4,141 28 14.877 52 R&M
5 26 Oil & Natural Gas Corp Ltd India 26,645 82 20,531 69 4,216 27 24.810 11 E&P
6 33 Indian Oil Corp Ltd India 26,817 81 43,998 29 1,679 57 13.232 59 R&M
7 40 China Shenhua Energy Co Ltd China 40,765 50 15,655 92 3,885 30 11.551 75 C&CF
8 46 PTT Plc Thailand 25,750 86 57,825 25 1,494 62 7.847 110 IOG
9 56 TonenGeneral Sekiyu Corp Japan 9,443 173 33,011 42 800 106 28.521 7 R&M
10 73 NTPC Ltd India 19,885 115 9,386 133 1,717 56 9.741 91 IPP
11 74 SK Energy Co Ltd Korea 19,884 116 42,405 30 716 116 6.372 133 R&M
12 75 Inpex Corp Japan 18,518 119 10,856 124 1,463 64 9.681 92 E&P
13 85 Woodside Petroleum Ltd Australia 11,945 154 4,541 179 1,354 67 18.060 35 E&P
14 86 CLP Holdings Hong Kong 17,136 125 6,988 154 1,341 70 9.753 90 EU
15 97 Bharat Petroleum Co Ltd India 10,117 168 23,599 61 375 158 10.105 86 R&M
16 98 China Coal Energy Co China 12,912 147 7,451 148 1,043 90 9.787 89 C&CF
17 102 PTT Exploration & Production Thailand 6,931 203 3,952 190 1,204 82 27.309 8 E&P
18 113 Formosa Petrochemical Taiwan 13,210 145 26,886 53 467 142 4.676 172 R&M
19 115 Santos Ltd Australia 7,843 194 2,094 229 1,251 77 23.589 16 E&P
20 116 Tokyo Electric Power Co Inc Japan 142,015 15 59,391 24 -853 243 -0.935 236 EU
21 120 S-Oil Corp Korea 6,145 219 18,624 77 360 163 12.492 67 R&M
22 121 Kyushu Electric Power Co Inc Japan 43,056 42 15,375 93 343 170 1.180 225 EU
23 123 Tenaga Nasional Bhd Malaysia 20,020 114 7,376 150 743 112 5.467 162 EU
24 124 Yanzhou Coal Mining Co Ltd China 4,703 238 3,817 192 947 97 24.380 12 C&CF
25 125 Kansai Electric Power Co Japan 73,002 22 28,140 50 -89 234 -0.194 234 EU
26 134 Tokyo Gas Co Ltd Japan 18,477 120 16,747 84 421 150 3.249 201 GU
27 135 Chubu Electric Power Co Inc Japan 57,292 30 25,319 58 -191 236 -0.521 235 EU
28 136 Nippon Oil Corp Japan 41,577 46 74,539 20 -2,538 248 -13.907 248 R&M
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

$425 billion. The Western major’s 2008 Mobil’s net income to drop 66% in the
fourth-quarter net income took a 33% second quarter. The firm faced criticism
blow, owing to the plunge in oil prices, after output fell in 2008 to its lowest
but then still finished the year with re- level since Mobil was acquired in 1999.
cord profits. The company is now spending billions
In 2009, market conditions have re- to find new reserves. ExxonMobil will
mained challenging, causing Exxon- also spend over $1 billion at two US
refineries, as well as one in Belgium
to improve its output of clean diesel
3. #1 in Asia by industry.
by 10%. It also saw start-up this year
Industry Company Country Platts Rank 2009
of production from its new giant LNG
trains in Qatar.
IOG Petrochina Co Ltd China 9
Chevron moved into second place
E&P CNOOC Ltd Hong Kong 21 in 2009 from fourth place in 2008,
R&M Reliance Industries Ltd India 25 having brought on-stream some sig-
C&CF China Shenhua Energy Co Ltd China 40 nificant new fields and improved its
IPP NTPC Ltd India 73 upstream revenues by about 50%.
Chevron started up new projects in
EU CLP Holdings Hong Kong 86
the US Gulf of Mexico and Indonesia
GU Tokyo Gas Co Ltd Japan 134 in 2008, while it nearly doubled pro-
DU AGL Energy Australia 230 duction capacity from the giant Ten-
Source: S&P Capital IQ Compustat/Platts giz field in Kazakhstan.

56 insight November 2009

 top 250 global energy companies
Platts Return on Industry
Top Rank Assets Revenues Profits invested capital (GICS
Asia 2009 Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code)
29 139 Hongkong Electric Holdings Ltd Hong Kong 8,829 181 1,644 237 1,033 91 14.259 55 EU
30 140 KEPCO Korea 70,312 25 25,440 57 -2,382 247 -4.575 244 EU
31 146 PT Bumi Resources Tbk Indonesia 5,320 230 3,378 207 645 122 20.954 24 C&CF
32 147 Hindustan Petroleum Corp Ltd India 9,161 180 21,659 64 289 187 5.728 153 R&M
33 148 Gail (India) Ltd India 5,355 228 3,996 188 590 126 16.042 43 GU
34 152 Idemitsu Kosan Co Ltd Japan 23,983 97 38,317 34 34 231 0.357 232 R&M
35 153 Tohoku Electric Power Co Inc Japan 42,097 44 18,594 79 -321 240 -1.157 238 EU
36 158 Korea Gas Corp Korea 17,563 123 18,874 74 264 195 2.274 215 GU
37 159 Osaka Gas Co Ltd Japan 15,212 134 13,384 110 364 162 3.177 203 GU
38 164 GS Holdings Corp Korea 18,424 121 32,342 44 90 229 0.890 226 R&M
39 171 Nippon Mining Hldgs Inc Japan 19,754 117 41,006 33 -412 241 -4.089 242 R&M
40 177 China Yangtze Power Co China 8,454 183 1,287 245 574 127 8.134 105 IPP
41 178 Chugoku Electric Power Co Japan 29,390 71 11,840 117 -238 238 -1.129 237 EU
42 180 Cosmo Oil Co Ltd Japan 15,086 135 34,582 40 -932 244 -13.508 246 R&M
43 181 Hong Kong & China Gas Co Ltd Hong Kong 6,703 208 1,590 238 554 131 9.804 88 GU
44 186 Showa Shell Sekiyu KK Japan 12,673 150 33,014 41 -164 235 -4.111 243 R&M
45 190 Cheung Kong Infrastructure Bermuda 5,807 221 315 250 569 128 10.570 82 EU
46 195 Shikoku Electric Power Co Japan 14,722 137 6,407 161 294 186 2.992 207 EU
47 201 Origin Energy Ltd Australia 10,056 169 6,274 162 282 191 4.466 176 IOG
48 203 Electric Power Development Co Japan 21,005 109 7,111 152 196 215 1.206 224 IPP
49 209 Huaneng Power International China 24,099 95 9,911 131 -541 242 -3.352 241 IPP
50 217 Datang Power China 23,029 99 5,383 168 120 227 0.801 229 IPP
51 230 AGL Energy Australia 7,564 196 4,117 185 240 200 4.467 175 DU
52 234 Hokuriku Electric Power Co Japan 15,228 133 5,292 170 75 230 0.643 231 EU
53 239 Reliance Infrastructure Ltd India 5,625 224 2,652 220 287 188 6.065 139 EU
54 243 China Resources Power Holdings Hong Kong 10,276 165 3,445 204 221 208 2.943 208 IPP
55 244 Power Grid Corp Of India India 9,189 178 981 249 307 175 4.278 183 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.

Third place Royal Dutch Shell’s $458 PetroChina was the only Asian IOG
billion revenues dwarfed even Exxon- representative in the top ten. Russians
Mobil’s. Voted “Energy Company of the Rosneft and Gazprom came in eighth
Year” at the 10th annual Platts Global and ninth, while Italy’s ENI was num-
Energy Awards last year, Shell is invest- ber ten. Gazprom ranked number two
ing heavily in LNG production as well in terms of profitability, second only to
as carbon capture and storage. It has ExxonMobil.
also, in 2009, made a major commit-
ment towards Floating LNG, while work
4. Fastest growing Top 250 Asian companies by industry.
progresses in Qatar on what will be the
world’s largest Gas-to-Liquids plant. Industry Company Country 3-year CGR Platts Rank 2009
BP moved up one place to fourth po-
IPP China Resources Power Holdings Hong Kong 65.300 243
sition, having finally resolved the battle
for control over TNK-BP with partners EU Reliance Infrastructure Ltd India 45.796 239
Alfa-Access-Renova in September 2008. C&CF PT Bumi Resources Tbk Indonesia 30.127 146
BP has also been sorting out several E&P Woodside Petroleum Ltd Australia 29.679 85
problems with its US refineries, includ- IOG PTT Plc Thailand 29.108 46
ing Texas City, which suffered a fatal
GU Korea Gas Corp Korea 27.940 158
explosion in 2005. BP’s fortunes may,
however, be turning after it made a gi- R&M Formosa Petrochemical Taiwan 27.822 113
ant oil find in the Gulf of Mexico in DU AGL Energy Australia 3.372 230
September 2009. Source: S&P Capital IQ Compustat/Platts

November 2009 insight 57

top 250 global energy companies

The Tiger Continues to Roar prompting further concern over the coun-
China, Hong Kong and India ruled tries’ greenhouse gas emissions. In 2009,
Asia and the Pacific Rim tables as oil China and India pledged to substantially
and coal demand continued to grow reduce emissions, and Shenhua signed an
across the region. The recession dented agreement in October to work with Shell
demand there as well as elsewhere, but to develop clean coal technology.
China’s seemingly endless thirst re- Asian companies made up more than
turned in the second half of 2009. 20% of the 50 fastest growing compa-
PetroChina briefly became the world’s nies list, and also took 30% of the top
largest firm in May 2009 before Exxon- 10 places in the R&M category. Reliance
Mobil edged it out again in October. The Industries and Indian Oil Corporation
firm led the Asian table as refining mar- were first and second, with TonenGen-
gins improved; the Chinese government eral Sekiyu of Japan third.
has embarked on a plan to slowly reduce
subsidies on oil products, making them European Utilities Bloom
more profitable for oil refiners. PetroChi- Eight of the top ten electric utilities in
na was followed by E&P giant CNOOC in Platts 2009 rankings were from Europe.
second place and Indian R&M Reliance Boosted by the European Commission’s
industries in third. New to the ranks of 20-20-20 targets, which mandates that
the Asian top energy companies by in- 20% of energy generation comes from re-
dustry catagory were NTPC, India’s largest newable sources by 2020, Europe is lead-
power company, Tokyo Gas Co., and AGL ing the world in solar, wind and hydro
Energy, an Australian distributed utility. power expansion. Spain, France and Ger-
Asia dominated the coal and consum- many are leading the rush to smart grid
able fuels (C&CF) market with three of technology development in EMEA.
the top eight firms coming from China, France’s EDF Energy ranked first in the
and one from Indonesia. China Shenhua European leading companies table. Also
Energy came in at number one in the in- ranked number one in terms of assets,
dustry, with China Coal Energy third and EDF has been on a buying spree; it took
Yanzhou Coal Mining fourth. Newcomer over UK nuclear provider British Energy
to the list PT Bumi Resources in Indone- in 2008 and Belgian electricity supplier
sia took sixth place. India is actively trad- SPE this year. Not to be outdone, Italy’s
ing coal and buying coal mines overseas, largest utility, the number two ranked
but no Indian company has yet made the Enel, bought a 25% share in Spain’s En-
top ten in the C&CF category. desa (ranked number 5) earlier this year.
Chinese and Indian demand for coal Only two US electric utilities made the
pushed prices to new heights in 2008, top ten ranks of the Top 250; Exelon of

5. Fastest growing EMEA companies.

3-year Platts
Rank Company Country Industry CGR Rank
1 Abu Dhabi National Energy Co United Arab Emirates DU 84.974 167
2 Iberdrola Renewables SA Spain IPP 53.876 173
3 Rosneft Oil Company Russian Federation IOG 42.254 7
4 Acciona SA Spain EU 37.682 96
5 Gazprom Oao Russian Federation IOG 36.502 8
6 Scottish & Southern Energy United Kingdom EU 35.830 127
7 Gazprom Neft Russian Federation IOG 31.257 24
8 BG Group plc United Kingdom IOG 30.826 17
9 Hera SpA Italy DU 29.012 247
10 Iberdrola SA Spain EU 28.996 36
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
Source: S&P Capital IQ Compustat/Platts

58 insight November 2009

 top 250 global energy companies

Illinois, a nuclear and fossil fuel utility,
and FPL of Florida, which is investing in
large-scale solar plants.
In the top 20 for all energy companies,
there were only three utilities–RWE (a
multi-utility) and electric utilities EDF and
ENEL. The Europeans were well represent-
ed in the top 50, while for the US, only Vir-
ginia’s Dominion Resources was ranked,
at 50th down 3 places from 2008.
Gas utilities climbed the ladder, ow-
ing in part to high natural gas prices
in first-half 2008. Gas Natural of Spain
came in 16 places higher than in 2008
at number 54, with Belgium’s Distrigas a
distant 112th (up from 149th in 2008).
Consumer complaints have been rife
and gas prices have since toppled, which
may damage their returns this year even
if winter arrives hard and early.
Independent Power Producer AES of
Virginia won the top spot among IPPs,
coming in at number 72 in the overall
rankings, with India’s NTPC second at
number 73. A contraction in power de-
mand this year is expected to damage
revenues. Among multi-utilities, Ger-
many’s RWE ranked first (Platts rank
number 14). France’s GDF Suez, a new-
comer to the list after the merger of GDF
and Suez in 2008, came in second, and
at number 27 in the overall rankings.
2009 newcomers to Platts Top 250
were heavily weighted toward utilities,
which comprised 14 of the more than
30 newly-ranked companies. Of the 14,
seven were electric utilities and the rest
scattered between gas, multi and inde-
pendent utilities. The industry contin-
ues to attract new investment, despite
the challenges it faces with “greening
up” its generation and carbon cap and
trade policies. Other newcomers fell
primarily in the E&P space, with high
prices attracting new investment there
and in storage & transportation. ■

6. Top 50 fastest growing companies.

3-year Platts 3-year Platts
Company CGR Rank Company CGR Rank
1 ONEOK Partners LP 124.912 129 26 BG Group plc 30.826 17
2 NuStar Energy LP 94.176 227 27 Endesa 30.425 130
3 Abu Dhabi National Energy Co 84.974 167 28 Encana Corp 30.314 16
4 Ultrapar Participacoes SA 81.937 202 29 PT Bumi Resources Tbk 30.127 146
5 China Resources Power Holdings 65.300 243 30 XTO Energy Inc 29.829 69
6 Addax Petroleum Corp 57.587 126 31 Ecopetrol SA 29.764 30
7 Iberdrola Renewables SA 53.876 173 32 Woodside Petroleum Ltd 29.679 85
8 Southwestern Energy Co 50.631 166 33 Cameco Corp 29.627 200
9 Reliance Infrastructure Ltd 45.796 239 34 PTT Plc 29.108 46
10 Suncor Energy Inc 43.262 48 35 Hera SpA 29.012 247
11 Enterprise GP Holdings LP 42.503 142 36 Iberdrola SA 28.996 36
12 Rosneft Oil Company 42.254 7 37 Canadian Oil Sands Trust 28.455 110
13 Penn West Energy Trust 41.308 118 38 Korea Gas Corp 27.940 158
14 Fortis Inc 39.751 246 39 Formosa Petrochemical 27.822 113
15 Acciona SA 37.682 96 40 Enersis SA 27.404 93
16 Gazprom Oao 36.502 8 41 Anadarko Petroleum Corp 27.280 39
17 NRG Energy Inc 36.485 95 42 Reliance Industries Ltd 27.226 25
18 Scottish & Southern Energy 35.830 127 43 Yanzhou Coal Mining Co Ltd 27.159 124
19 Chesapeake Energy Corp 35.588 111 44 LUKOIL Oil Company 27.103 12
20 Encore Acquisition Co 35.408 198 45 Tupras 27.068 132
21 Denbury Resources Inc 34.671 204 46 China Shenhua Energy Co Ltd 27.048 40
22 Range Resources Corp 34.191 225 47 A2A SpA 27.045 156
23 Husky Energy Inc 34.091 35 48 Datang Power 26.973 217
24 Murphy Oil Corp 32.938 44 49 Novatek Oao 26.944 151
25 Gazprom Neft 31.257 24 50 Integrys Energy Group Inc 26.360 191
Source: S&P Capital IQ Compustat/Platts

November 2009 insight 59

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